The government's possible loss of three seats in Tasmania is emerging as one of the shocks of the election, as key Tony Abbott loyalist and former army officer Andrew Nikolic conceded defeat in his seat of Bass early in the night. 
Voters in Bass have rejected incumbent MPs for 15 years in the marginal seat, which takes in Launceston and small towns the north and north-east.
Elected in 2013, Mr Nikolic emerged as a conservative voice within the Coalition and briefly served as government whip in 2015, replaced when Prime Minister Malcolm Turnbull rolled Tony Abbott.
He conceded defeat to Labor's Ross Hart about 8pm, amid an about 10.5 per cent swing away from the government in the state's biggest electorate.
Mr Nikolic refused to give television cameras access to his election night function.
Dubbed the Liberal "three amigos", Mr Nikolic, Lyons MP Eric Hutchinson and Brett Whiteley in Braddon all risked losses, after each supported Mr Abbott over Mr Turnbull in the   September leadership spill.
The election campaign was interrupted by the worst flooding in nearly a century, which hit regional communities in Tasmania and left three people dead and about $100 million in damage nationally.
Mr Hart told supporters they had helped deliver Labor "a famous victory" in Bass.
"There is no electorate that is too blue to be turned into a red electorate," he said.
Lyons, which covers nearly half of the state, looked set to elect Labor's Brian Mitchell over Mr Hutchinson with a swing of about 3.75 per cent under way.
Mr Hutchinson cited anti-government robo-calls to voters in the electorate as a key factor but was not conceding defeat.
"We're not giving up at this stage, it was always going to be close," he told ABC TV.
"There's a lot of very vulnerable people who were frightened by a whole series of lies. It seems to have had an impact."
The seat has had four members since 1983. In Braddon, Labor's Justine Keay looked set to topple Mr Whiteley, recording about 5.1 per cent swing during counting.
Independent Tasmanian MP Andrew Wilkie, set for re-election, said the state was delivering a strong message to both the Coalition and Labor. He said the major parties were out of step with community attitudes.
Labor's Julie Collins is expected to hold her seat of Franklin comfortably.