MELBOURNE (REUTERS) - A candidate from Australia's opposition claimed victory on Sunday (July 5) in a close by-election seen as a referendum on Prime Minister Scott Morrison's handling of bush fires and the Covid-19 pandemic.

Ms Kristy McBain of the centre-left Labor Party claimed a narrow win over Ms Fiona Kotvojs of Mr Morrison's conservative party in the electorate of Eden-Monaro in New South Wales.

"I'm very pleased and honoured to be the next member for Eden-Moreno," Ms McBain said in televised remarks.

Ms McBain received 50.58 per cent of the votes, while Ms Kotvojs got 49.42 per cent, according to the Australian Electoral Commission's website.

Although not a major blow to Mr Morrison - the results will not affect the balance of power in parliament - Ms McBain's apparent victory shows that a recent rebound in the prime minister's approval ratings has not decisively translated into votes.

Mr Morrison's uniting management style in the Covid-19 pandemic and his decisive measures have made him the country's most popular leader in a decade.

That followed a steep decline in his popularity at the start of the year over his handling of the devastating bush fires that killed dozens of people and millions of animals, charring vast swathes of land.

"It has been an election that had been fought on local issues first and foremost," said Ms McBain, whose electorate on the south coast of New South Wales state suffered severely from the bush fires.