Australia's conservative govt revels in re-election

Australia's conservative government celebrated on Sunday its surprise election victory that defied years of unfavourable opinion polls, with U.S. and Israeli leaders welcoming Prime Minister Scott Morrison's return to the office.

Australia's Liberal-led coalition has won or is leading in 74 seats in its quest for a 76-seat majority, according to the Australian Electoral Commission, with three-quarters of votes counted.

The opposition Labor party has conceded defeat and Bill Shorten stepped down as its leader.

"Congratulations to Scott on a GREAT WIN," U.S. President Donald Trump said on Twitter.

The White House said Trump and Morrison spoke by phone and "pledged to continue their close cooperation on shared priorities".

Morrison told raucously cheering supporters late on Saturday, who just hours earlier had seemed resigned to defeat, that he had always believed in miracles.

The result drew comparisons with Republican Trump's victory in 2016, when the real estate mogul defied polls to defeat Democratic rival Hillary Clinton by winning over the so-called silent majority.

Opinion polls in Australia had all pointed to a Labor victory ahead of Saturday's vote. So strong was the expectation the government would fall that one betting agency even paid out bets on a Labor win days before the election.

Morrison, however, cast himself as the candidate who would work for aspirational voters and the tactic seemed to strike a chord.

A Pentecostal church-goer, Morrison took over as prime minister last year when he emerged as the unexpected winner of infighting within the Liberal party, the senior partner within the Liberal-National coalition.

It is still unclear whether the coalition can govern with an outright majority or will need to negotiate support from independents, with millions of early votes cast before polling day still to be counted.

Several seats in the 151-seat House of Representatives are still too close to call.

Treasurer Josh Frydenberg, who fended off a tough contest from independent and Greens candidates in his Melbourne electorate, told Australian Broadcasting Corp. television on Sunday Morrison had led with energy and conviction.

"From the minute the starter's gun was fired in this campaign, we knew we were behind, but we also knew we were in it," Frydenberg said.

The government campaigned on a platform of tax cuts and stability, while Labor promised to reduce inequality through tax reform, higher wages, better public infrastructure and faster action on climate change.

Fitch Ratings said in a note the result would bring policy continuity, including the coalition's pledge to start delivering budget surpluses next financial year.

Israeli Prime Minister Benjamin Netanyahu also congratulated Morrison on Sunday.

"I know that under your leadership the great friendship between Australia and Israel will grow even stronger," Netanyahu said on Twitter.

Australia formally recognised west Jerusalem as Israel's capital late last year, reversing decades of Middle East policy and following Trump's decision to move the U.S. embassy to Jerusalem from Tel Aviv.

Morrison, who was widely criticised for the decision, said at the time Australia would not move its embassy to Jerusalem immediately. (Reporting by Lidia Kelly in MELBOURNE and Jonathan Barrett in SYDNEY Additional reporting by Steve Holland and Timothy Gardner in WASHINGTON and Ari Rabinovitch in JERUSALEM Editing by Paul Tait)