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Muswellbrook Mayor Martin Rush has conceded defeat in the seat of Upper Hunter to National Party candidate Michael Johnsen.
Mr Rush said he phoned Mr Johnsen a short time ago.
In a post on his Facebook page, Mr Rush thanked supporters and campaign workers as well as voters who backed him.
"We can be proud that we have achieved the best result for Labor in the Upper Hunter at a general election in almost a century," he said.
Mr Rush said it appeared on the current count that Labor had achieved a swing of nearly 22 per cent.
The previously safe Nationals seat was held by George Souris for about two decades on a margin of about 23 per cent, but he is retiring.