Australians are betting that a minority government expected to be formed in the next few weeks will not last a full term and fresh elections will be called in 2011, an online bookmaker said on Friday.
And at least one analyst said a new poll could be seen as a positive development and preferable to an unstable government.
Speculation has emerged that conservative leader Tony Abbott is manoeuvring for another vote after his Liberal-Nationals coalition edged ahead of Labour on seats, although neither side will have a majority without relying on independents.
Counting from the August 21 election continues next week. It may take weeks to announce who will form a minority government.
Markets are hoping for a conservative government to kill Labour Prime Minister Julia Gillard's plans for a 30 percent mining tax, a price on carbon emissions, and a $38 billion broadband network.
Prolonged political uncertainty in Australia could unsettle the finance and business sectors, which have so far taken the hung parliament in their stride, with only a small, initial sell off in the local currency and stocks on Monday.
Fresh elections, while unsettling, may also be seen as a positive as it could result in majority, stable government, Macquarie Bank senior economist Brian Redican said.
If the alternative was an election or an unstable government where there was no major policy decisions being made, then I think an election would be preferable, Redican said.
However, the election itself is a distraction for business and consumers. You can get temporary pauses in spending. Having two elections close together could be a real problem for business in the second half of 2010.
The stability of a minority government is a major negotiating issue for the five kingmaker independent and Green MPs, prompting both Gillard and Abbott to pledge they would serve a full term. Gillard has even offered to set the date of the next election, due by late 2013, with the five.
Gillard and Abbott are holding talks with the kingmakers to try to secure the 76 seats needed to form a government in the 150-seat lower house. The conservatives have provisionally won 73 seats, while ruling Labour secured 72 seats.
Gillard met the Greens on Friday, with party leader Senator Bob Brown saying the talks were very constructive. The Greens said in the campaign that they preferred the Labour government.
We are working to see if a Labour government can be formulated, Brown told reporters after the meeting, adding Abbott had not yet organised a meeting.
Speculation has grown that there could be another election in 2010 to end the political deadlock after Abbott took a hard line in negotiations with the crossbench MPs.
I think Mr Abbott needs to be very clear about this, and make it clear that he does not want to have another election, but is committed to a three-year term of government, whether it is his government or a Gillard government, Brown said. Stability of government is something we all need to commit to.
Online bookmakers Sportingbet said the odds were shortening for an early election, possibly in 2011, to sort out the impasse.
Punters know that any minority government would face plenty of problems and the new prime minister, whoever that may be, could be forced to call an early election, Sportingbet Australia chief Michael Sullivan said.
Sportingbet's odds for an election in 2011 are A$2.25 for a A$1 bet. An election in 2010 is seen as less likely on A$5.00.
The Greens doubled their vote at the election and will hold the balance of power in the Senate. They would not want another election which might risk diminishing their influence.
The independents are reluctant to return to the ballot box for the same reason and say the hung parliament is a message from voters that they want independent voices in the next parliament.
(Editing by Michael Perry and Ron Popeski)