These guys explain it (so how come I still have no idea?)
Big H/T to Don Surber
Update: Skeeter in Australia explained it to me this way in response to my email inquiry:
As vote-counting finished last night, there were still a few seats still in doubt.
But it looks very much like our first hung parliament in 70 years will be the result.
There are 150 federal electorates across the country; each elects one representative to the House of Reps.
Therefore, for a party to govern in its own right, it needs a minimum of 76 seats to assure a majority vote on any legislation.
Three Independents and one Green were elected yesterday, leaving 146 seats for the two major parties (Liberal-National Coalition and Labor).
Because neither party had achieved 76 seats at the close of counting, the Parliament is "hung".
What happens next is that each major party will woo the other (cross-bench) elected members and try and convince enough of them to come on board to form a government.
A further complication is that the government must provide a Speaker, who cannot vote on a bill. This means that 77 members of like mind are required to form a stable government.
In a hung parliament, the Speaker's job is usually offered to an independent or minor party member.
At the moment, the official Electoral Commission score board is: ALP 71, Coalition 71, Green 1, Independents 3, and three seats still in doubt.
As I type this on Sunday morning, the ABC is announcing ALP 70, Coalition 72 with a likely result of 72:73.
Green will support Labor. The 3 independents are more likely to support the Coalition, but it is not a done deal yet.
Opinion is divided, but the general feeling is that the Coalition will gain in the 3 doubtful seats, and the independents are more likely to side with the Coalition, thus allowing them to form a slim majority government.
The final counting may take a week or so. Postal votes will not be counted until Thursday and final counts are complicated by our preferential voting system.
In close seats recounts are almost inevitable.
After the final count, the next step will be for each party to present to the Governor General (representing the Queen) and convince her that they can form a government.
The Coalition has gained a big majority of total primary votes from the population and will probably win slightly more seats than the ALP.
In a "hung" situation, this should allow the GG to decide in the Coalition's favour.
(Sadly, there is some doubt regarding her impartiality. Her daughter is married to one of Labor's successful candidates.)
Yesterday's voting also included a ballot for the Federal Senate, our house of review. Reps are elected for a maximum term of three years — Senators for six years.
Normally, we vote for half the senate at each federal election, so that yesterday, we were replacing those senators elected 6 years ago.
The exception is when a government calls for a "double dissolution" because they can't get their legislation passed through the Senate. In that case, all senators retire and we can get an entirely new bunch.
Each state elects its own senators. Because the votes are drawn from the entire state rather than from individual regional electorates, the Senate results can be quite different from the Reps result.
The Greens have strengthened their grip of the Senate and now have nine senators, giving them a balance of power in the upper house. This is potentially disastrous for Australia because the Greens are likely to force a Labor government into even more extreme environmental socialism (socialistic environmentalism?).
An example of this is that, during the Rudd government, the Green senators sided with the Coalition senators in blocking Labor's insane emission trading scheme — the Greens thought Labor targets for reducing "carbon" were too low.
Our morale is a lot higher than it was before the election. The big gain is that Labor's profligacy has been stemmed, at least for the moment.