Labor's candidate in the Wagga Wagga by-election has conceded defeat to his independent rival, Joe McGirr, while warning the NSW government it is facing a "catastrophic" general election in early 2019.
Dan Hayes says he called Dr McGirr on Monday because "unless something miraculous happens" preferences will deliver victory to the local doctor when the result is announced on Thursday.
Mr Hayes said he was proud of the ALP campaign, which helped ensure the Liberal Party lost the safe seat after more than 60 years.
"(The voters) have walked away from the LNP government because the government walked away from them," he told AAP on Monday.
"They turned up with chequebooks and people saw right through it."
The swing against the government of almost 30 per cent was a "catastrophic" blow, Mr Hayes said, which would likely be repeated across regional seats in March's general election.
Dr McGirr won 25 per cent of the formal primary vote as did Liberal candidate Julie Ham who, even when preferences are counted, has no chance of winning the seat. Mr Hayes received 24 per cent of first preference ballots.
The official result, based on the crucial preference flows, will be announced on Thursday morning by the NSW Electoral Commission.
Dr McGirr told AAP his rival must "know something I don't" to concede defeat so early but he thanked Mr Hayes for running a professional campaign and committed to work with the Labor councillor.
"My focus was less about taking a seat from the Liberals and more about not letting us be taken for granted," the independent told AAP.
"I am humbled and thrilled with the support I've been given. I am going to get down to work as quickly as possible for all in the electorate."
Premier Gladys Berejiklian accepted responsibility for the loss but said the messy removal of Malcolm Turnbull as prime minister, combined with the local corruption scandal that sparked the early poll, provided a "perfect storm".
Federal cabinet minister Mathias Cormann says there's "no question" the Canberra bloodletting hurt the state party but argued it wasn't the main reason for the poor showing.
"A local member (ex-Liberal MP Daryl Maguire) being forced to resign over corruption allegations which were admitted - of course voters will be very upset about that," Senator Cormann told ABC radio.
His colleague, Christopher Pyne, argued the federal Liberal Party needs to end the "parlour games" and listen to voters.
NSW Nationals leader John Barilaro wants his colleagues to "start connecting to real people".
"We're standing with our $600-$700 suits on and our shirts pressed and our ties in a perfect knot and we are standing there saying we understand," he told News Corp Australia.
"It's time to throw that to the side and start being real people who understand real issues."
Ms Berejiklian agreed and said all politicians needed to "keep it real" and accept the message from voters.
"We've listened to them and we appreciate what they've told us," she said in Sydney.
Australian Associated Press