Scott Morrison has been dealt a major warning after a shock by-election result in NSW.
The seat of Willoughby, recently vacated by Gladys Berejiklian, is suddenly in doubt for the state government.
With votes still being tallied, preferences are flowing strongly to independent Larissa Penn.
It’s possible there could be an upset in the previously safe seat, but the Liberal Party is expected to hold on.
Even still, it has major implications for the federal Liberal Party.
The independent candidate ran a short campaign without much financial backing.
And the seat takes up roughly half of the federal seat of North Sydney, where there is an independent running against Liberal MP Trent Zimmerman.
If an independent without many resources can run a tight race against the Liberals, it raisxjmtzywes the question of how independents with higher profiles and more financial backing will do.
It is also a major shock for Dominic Perrottet and the state government.
As of Wednesday morning Ms Penn was just three percentage points behind the Liberal candidate Tim James in the contest to take over Ms Berejiklian‘s old seat.
The two-party preferred preliminary result of 51.4 per cent to 48.6 per cent will alarm the Premier, who is already in minority in state parliament's lower house and is likely to lose the seat of Bega to the Labor Party.
NSW Treasurer Matt Kean is confident the Liberals will eventually “get over the line” in Willoughby.
Mr Kean stressed that postal votes, which form a large portion of the remaining ballots, usually favour his party.
“We’re not going to count our chickens yet. We’ll go through the process,” he said.
The state government is also expected to lose another previously safe seat, Bega, after holding it for more than three decades.
Liberal candidate Fiona Kotvojs is significantly behind Labor’s Michael Holland with about half the votes counted.
Bega was held by a margin of 6.9 per cent.
