The win thwarted the rival Labor party's ambitions of an early comeback. More importantly, the election dealt a crushing blow to the ultra-right- wing One Nation party which gained just over eight per cent of the vote - far less than it had hoped for following its stunning 23 per cent showing in elections in the state of Queensland earlier this year.
To add insult to injury, One Nation's leader, Pauline Hanson, who calls for a freeze to Asian immigration and cuts to welfare programmes for Aborigines, appeared to have failed in her own bid to win a parliamentary seat in Blair, Queensland.
"What is clear tonight is that the anti-trade, racist element of One Nation has been rejected by the people of Australia," said a relieved deputy prime minister, Tim Fischer, whose National party was most under threat from One Nation.
With some votes still to come in, the conservatives appeared to have lost at least 20 of their previous 41-seat majority.
The centrepiece of Mr Howard's campaign was a pledge to cut personal taxation to be paid for by a new goods and services tax. Mr Howard told party workers in Sydney: "This is probably the first time in the recent experience of Western political parties that a party has won [on] such a major reform that ... lent itself to a dishonest fear campaign."
Kim Beazley, leader of the Labor party, had warned voters that once Mr Howard's new tax was plumbed in to the system it would be impossible to repeal. Addressing supporters in his Western Australian constituency of Brand, Mr Beazley said his party had won 17 of its 27-seat target list, but despite 12 seats still "hanging" it would be "difficult to achieve a winning position".
Whether Mr Howard will be able to deliver the entirety of his reform package is open to doubt. The VAT-style tax will cover fresh food and children's clothes, and with a wafer-thin majority in the lower chamber of parliament, he will find it hard to force through unamended - especially as the upper house could still delay it. Unease over the tax, criticised for hitting the poor, has focused on its incompatibility with traditional Australian values of "a fair go" for all.
Several days will pass before the final results are known, however. There are postal votes to come, and, because of the preferential voting system, second choices to allocate.
A possible comeback of epic proportions by Labor, though, seemed to have been lost through the patchy nature of the party's performance.Reuse content