By Jack Gramenz and Rachael Ward in Melbourne

Prime Minister Anthony Albanese’s birthday wish has come true as Labor is projected to retain its seat following a by-election in Melbourne’s Dunkley electorate triggered by the death of MP Peta Murphy.

ABC election analyst Antony Green called the seat for Labor with 59 per cent of the votes counted at 8.45pm on Saturday.

Labor and the Liberals both tempered expectations of victory in the vote triggered after Ms Murphy lost her battle with cancer in December.

Community leader Jodie Belyea retained the seat for Labor despite a swing in the seat Ms Murphy held on to a 6.3 per cent margin.

The opposition pinned its hopes on Frankston City Council mayor Nathan Conroy running for the Liberal Party, but the 3.8 per cent swing he managed was not enough to secure the seat.

Mr Albanese made an early appearance at a polling station on Saturday, his 61st birthday, alongside Ms Belyea and his fiancee, Jodie Haydon.

“What I want for my birthday is obvious today, which is a win for Jodie Belyea,” Mr Albanese told reporters.

Cost of living was front and centre in the campaign, with Mr Albanese talking up a bigger tax cut for lower and middle income earners under the government’s revamped tax package.

On Saturday, he claimed opponents had spent more than Labor in the lead-up to the by-election which he described as a “negative right-wing campaign” fuelled by money from unnamed billionaires.

“We’ve seen people in this electorate get swamped on Facebook and on all of the advertising that’s taken place with misinformation, with fear,” Mr Albanese said.

Ms Belyea vowed to “bat for the battlers” as she talked up her connections to the community.

Liberal Senator Jane Hume praised Mr Conroy for his efforts on Saturday night.

“Dunkley was never a marginal seat… but by hell it’s a marginal seat now,” Ms Hume said.

She earlier joined Mr Conroy at a primary school polling booth in Langwarrin for a media conference that was frequently interrupted by hecklers.

“We don’t shout people down,” Mr Conroy said as a protester interrupted him.

“What we do have is a strong positive campaign.”

Mr Conroy said the rising cost of living was the number one issue for voters, while also promoting local infrastructure investment.

“We need to have more jobs, more business, more choice, more homes for people,” he said.

“Then you look at crime, crime is on the rise and that’s because of the housing crisis and the cost of living crisis.”

Opposition Leader Peter Dutton did not make an appearance on Saturday but has previously said that while the vote won’t change the government, it could send a message to the prime minister he was not doing enough.

He said anything more than a three per cent swing from the government would be a terrible outcome for Mr Albanese.

Dunkley doesn’t do it for Dutton