The Wentworth Loss Could Throw The Government Into Chaos

Phelps' likely win in Wentworth will see the government's numbers drop from 76 to 75 in the 150-seat House of Representatives.

Simple maths shows the government would need the support of at least one more MP to guarantee the passage of legislation in the chamber, and considering former Nationals member Bob Katter votes with the government most of the time, they should be safe.

Phelps supporters cheer during a Wentworth by-election evening function at North Bondi Life Saving Club on Saturday. Image: AAP

In addition, despite there being 150 seats, the chamber is very rarely totally full, with MPs variously absent for health, family or travel reasons, so having 76 votes isn't always necessary -- often legislation passes with just 60 or 70 votes in favour.

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But the Wentworth by-election loss means the government's destiny is no longer in its own hands, and they may have to rely on the often unpredictable crossbench -- and the utterly unpredictable Katter as perhaps its main ally -- or circumstance to pass legislation.

The loss also has the potential to bring down the government entirely on several different fronts. For one, Phelps told ten daily she hasn't yet made up her mind on whether she would vote to refer Peter Dutton to the High Court over his section 44 constitutional issues arising over his financial interests in childcare centres.

Image: AAP Photos

The last vote spared Dutton a referral, but only by one vote -- with Turnbull gone, and Phelps in, that equation could flip.

Phelps also wants kids off Nauru. She told Studio 10 on Monday that she "would have to see" if she would support a no-confidence motion in the government, if efforts to evacuate children from the island were stymied. Again, with just 75 MPs in the chamber, the government could lose that vote too.

READ MORE: Kerryn Phelps Could Bring Down The Government Over Nauru

The loss of Wentworth could see the government forced to negotiate and horse trade on any number of tight votes, meaning this could quickly become a parliament of compromise -- or, conversely, gridlock, if crossbenchers decide not to come to the party.

Phelps claimed victory on Saturday night when she achieved an unprecedented swing of more than 20 percent against the Liberal Party in the eastern Sydney seat.

Prime Minister Scott Morrison embraces Liberal candidate Dave Sharma prior to his concession speech, at the Liberal Party Wentworth by-election function in Double Bay, Sydney. (image: AAP)

But that changed on Sunday as the margin between the two narrowed to less than 900 votes at one point while postal ballots were still being counted. By Monday morning, however, a combination of more postal votes and a recount of some miscounted votes had increased her lead to nearly 1600, seemingly putting victory beyond doubt.

The candidate called it a "white knuckle ride".

Phelps recorded a strong result among ballots cast at polling places on Saturday, while Sharma was claiming as many as two out of every three postal and pre-poll votes when those ballots started being counted late on Saturday night -- after Phelps had claimed victory and Liberal candidate Dave Sharma had conceded defeat.

Postal and pre-poll votes are often lodged by older voters or those who are less able to travel on election day. And because Liberal voters tend to be older, the Liberals traditionally poll better in those votes.

A sizeable proportion of Wentworth's large Jewish population would also have lodged postal or pre-poll ballots instead of voting on Saturday, pundits say, due to Jewish tradition.

Recounts of several polling booths found mistakes in the initial count, with Phelps picking up extra votes and Sharma losing some. What seemed for a few hours like it could be a race too close to call, soon widened and gave Phelps some breathing room by Sunday night.

The results as of 7.45 am on Monday. Source: AEC.

Counting mistakes often happen during elections, but often don't make a difference except in very tight races.

Early on Sunday, Prime Minister Scott Morrison said he was holding out hope Sharma could still snatch a win in the traditional Liberal Party stronghold.

READ MOREThe Wentworth Race Isn't Over Yet And The Liberals Could Actually Still Win

But he added it was clear the electorate was furious about Malcolm Turnbull, who had been the member for Wentworth since 2004, being ousted as prime minister in August.

"Liberal voters expressed their anger at the parliamentary Liberal Party ... and we copped that fairly on the chin," Morrison said.

READ MOREThink The Wentworth Loss Was Shocking? The Blame Game Will Be Brutal

ABC election analyst Antony Green, who called the win for Dr Phelps on Saturday night, said the count for four pre-poll booths and postal votes was done late on the night.

He said voting booths skewed to Phelps on Saturday, showing there had a been a late surge for her.

If Phelps is confirmed the winner, there will be a cross bench of six members in the House of Representatives, with Labor holding 69 seats and the coalition one short of a majority with 75.

Prime Minister Scott Morrison addresses the Liberal Party Wentworth by-election function, with Josh Frydenberg and candidate Dave Sharma either side. (Image: AAP)

Despite heading towards a minority government, Morrison has talked up the Coalition's relationship with the crossbenchers.

"What I will continue to do is be working closely with the crossbenchers, as I have been doing, because ... we have been at 75 (seats), not 76, since the former prime minister resigned," Morrison said.

With AAP.