Albanese said the government's focus on making a practical difference in people's lives resonated with voters, who understood the spike in living costs was because of global supply chain problems linked to Russia's war in Ukraine. But despite calling the election result "a historic win", Albanese said his government would remain grounded.
"This was a significant victory ... but we don't get carried away with this," Albanese told ABC Radio in an interview.
The last time the opposition lost a by-election to a government candidate was in 1920, in the Western Australia state goldfields electorate of Kalgoorlie.
The by-election in Aston was triggered after former Liberal minister Alan Tudge, who won with a slim 2.8% margin in the 2022 general election, quit politics due to personal reasons.
Albanese, who is set to finish a year in power next month, has enjoyed high approval ratings since becoming prime minister. A newspoll published by the Australian newspaper on Monday showed him stretching his lead to 58% as the preferred leader, eclipsing opposition leader Peter Dutton's 26% support. The survey of 1,500 voters also showed Labor extending its lead on a two-party preferred basis to 55%, against the opposition's 45%.
The by-election win comes a week after Labor returned to power in New South Wales, Australia's most populous state. The win means the party now governs at state and federal levels across Australia's mainland, leaving island state Tasmania as the conservative outlier. (Reporting by Renju Jose in Sydney; Editing by Jamie Freed)
