The Queensland Liberal-National Party has suffered a 10 percent swing in the safe LNP seat of Toowoomba South.
With 45% of first preference votes already counted the LNP are set to retain the seat but with a reduced margin.
The by-election has also been viewed as a litmus test for Opposition Leader Tim Nicholls, doubts may well be cast on his ability to challenge the Palaszczuk Government.
The makeup of the hung parliament in Queensland will not change.
The Queensland Labor Party didn’t field a candidate in the by-election because their focus was on the federal election.