By Jane Wardell and Jonathan Barrett
SYDNEY (Reuters) - Independent candidates who will likely determine a cliffhanger Australian election shot to prominence on Monday, one of them renewing anti-Asian rhetoric first heard 20 years ago, with Prime Minister Malcolm Turnbull under fire for a failed political gamble.
Pauline Hanson, founder of the controversial far right One Nation party, used the political limbo that has resulted from Saturday's close vote to push her far-right agenda that first won her international notoriety in 1996, warning that Australia was being "swamped by Asians".
"A lot of Australians feel that Asians are buying up prime agricultural land, housing," Hanson said at a fiery media conference in Brisbane on Monday, where she also reiterated her anti-Islam stance.
"Do you want to see terrorism on our streets here? Do you want to see our Australians murdered?" she said.
With the two major parties, the conservative Liberal-National coalition and centre-left Labor, sitting on the sidelines waiting for a result that could take days, it was left to another independent, centrist Nick Xenophon, to mount a defence of multicultural Australia.
The power vacuum that allowed Hanson to re-emerge showed just how badly Turnbull's gamble of dissolving both houses of parliament, to clear out minor parties and independents he said were blocking his reformist agenda, had failed.
Saturday's election was meant to end political turmoil that had seen four prime ministers in three years. Instead, it left Turnbull's own leadership in question less than a year after he ousted then prime minister Tony Abbott in a party-room coup.
"I think in the end he should be asking himself if he has done the Liberal Party a service or a disservice," Corey Bernardi, a senator from Turnbull's Liberal Party, said.
Labor leader Bill Shorten also called on Turnbull to quit, likening his position to that of British Prime Minister David Cameron after last month's "Brexit" vote.
Turnbull, acting as caretaker prime minister while vote counting continues, appeared to have underestimated the protest vote that stole support from both major parties and must now negotiate with minor parties and independents to retain power.
Labor had won 67 seats to the coalition's 65 before counting was paused on the weekend, with the Greens picking up one seat and independents claiming four. The major parties need 76 seats to form a majority government in the House of Representatives.
With the result of 13 seats still in doubt, political pundits were predicting one of two main scenarios: the coalition scrapes across the line by picking up nine or more of the undecided seats, or it fails to reach 76 and has a hung parliament where neither side holds power.
Even if the government scrapes through, Turnbull will likely face an even more hostile upper house Senate, leaving his election agenda that includes cuts to healthcare and a A$50 billion corporate tax break over 10 years further in doubt.
Moody's Investor Service warned that policy paralysis when it comes to repairing the budget deficit could have an impact on Australia's coveted triple A credit rating. [S9N14200E]
"Looking ahead, trends in Australia's credit profile will be determined by whether fiscal objectives are effectively implemented, whether external financing conditions remain favourable and how housing market developments affect domestic growth and financial conditions," Marie Diron, Senior Vice President at Moody's, said in a statement.
Turnbull said on Sunday he remained "quietly confident" of returning his coalition to power for another three-year term. Vote counting could still take several days, electoral officials have said.
While the counting dragged on, Andrew Wilkie, one of the key independents, told ABC radio he was adamant he would "do no deals". "Neither the Labor Party or the Liberal Party have a God-given right to rule," he said.
A second independent, Cathy McGowan, also said she did not intend to decide which side to support until the votes were counted and parliament resumed.
"There is enormous disappointment with the way the government has been working," McGowan said.
Vote counting for the upper house Senate resumed on Monday but counting for the lower House of Representatives does not restart until Tuesday. The delayed counting is a result of new security measures by the Australian Electoral Commission.
(Editing by Phil Berlowitz and Paul Tait)