Professor Warhurst said there are a number of reasons leading the ruling Labor party to lose seats in this election.

Former prime minister Kevin Rudd was replaced by his deputy Julia Gillard only two months before the election, and that certainly was one reason showing the change did not succeed for the Labor government.

"At the time they were falling behind in the public opinion polls, and they thought the change in Prime Minister would in fact re-invigorate their popularity, although will never know that perhaps it was a mistake to replace Kevin Rudd with Julia Gillard, but beneath the change in leadership there were other deeper issues," he said.

Firstly, it lost votes to the Green Party for those who wished the Labor government to take active approach to climate change, and a number of other issues that appealed to those on the left of the Australian political spectrum, Prof Warhurst said.

The Labor party also lost votes to those in the middle ground of Australian politics, as the party attempted to introduce the idea of a super profits tax on the mining industry, which had not been completely resolved by the time of the election.

"And there were a range of other issues, which might be called maladministration or failure to act on the promises it made in 2007, and when it did act it appeared that it couldn't get the administration of these policies right," Prof Warhurst said.

On the impacts of hung parliament on Australia's politics, there have been concerns of instability after the government is formed.

Many claimed that there is possibility of a new election, or the possibility of a government that is restricted in what it can do and suffers repeated defeat in the parliament for its projects.

"I'm more optimistic. I think it's still possible that the hung parliament will lead to a relatively stable minority government and it will be finely balanced so that anything can happen over the next three years," Professor Warhurst told Xinhua.

"The most optimistic policy is that firm arrangements will be made, they will be made in writing between one of the major parties and some of the independents, and that there will have to be concessions in terms of policy and how those policies are conducted in parliament.

"But once those concessions have been negotiated I'm optimistic that there will be relative stability in Australian politics and the new government will be able to carry on with effective governance."

On foreign policy, many indicated Australia's first inconclusive election result in 70 years will threaten global perceptions of Australia as an investment destination, and leads to an unstable relationship with foreign countries.

"Australian foreign policy I don't believe will change very much whoever forms government. There's been a fair amount of agreement about most aspects of defense and foreign policy between the Labor party and the Coalition," Prof Warhurst said.

"As far as domestic policy is concerned, we really don't know yet who will form the government, what we can say is that there will be changes to domestic policy in that neither party will be able to implement its program in full."

Changes to domestic policy is expected to affects rural and regional Australia, Prof Warhurst said. The areas that are likely to get greater financial support are health, education, welfare and regional development policies, because that is the central plank of the independents negotiation with the major parties.