Jacinta Allan faces leadership crisis

Victorian Labor has entered its most serious leadership crisis since Daniel Andrews resigned, with factional powerbrokers reportedly moving against Premier Jacinta Allan less than four months before the November 28 state election.

Until the weekend, questions about Allan’s future had largely centred on poor polling, mounting economic pressure and whether Labor MPs might eventually decide that a change was needed.

That discussion has now moved well beyond speculation.

The Age reported on Sunday night that conveners from Labor’s Left and Right factions had met to determine whether Allan retained enough caucus support to lead the government into the election. Four sources with knowledge of the meeting told the newspaper there was broad agreement that her time as Premier was nearing its end, although there was no clear path for removing her.

One source told The Age that Allan had been informed she had lost the support of the Labor caucus. Allan, who spent Sunday night at her Bendigo home with senior advisers, reportedly told supporters she would not resign regardless of what factional leaders decided.

If that account is correct, the question is no longer whether there is internal unrest. It is whether Labor can execute a leadership change without paralysing the government weeks before the formal election campaign begins.

There is also no declared challenger.

Deputy Premier Ben Carroll remains the most likely replacement, but his position is complicated. According to The Age, Carroll has indicated to colleagues that he would be prepared to contest the leadership if the position became vacant, but would not use his own numbers to force Allan out.

That distinction may determine what happens next.

When leadership speculation surfaced in June, Carroll publicly ruled out challenging Allan and strongly backed her continuation as Premier. He told reporters he wanted his young daughter to grow up knowing he had supported Allan to be re-elected in her own right.

His position now appears to be that he would accept the opportunity to lead if Allan stepped aside, but would not be seen as the person who brought her down.

That leaves Labor’s factional leaders with few easy choices.

They could approach Allan and ask her to resign voluntarily. They could test her support at Tuesday’s caucus meeting. Or they could allow the pressure to continue in the hope that the Premier concludes she can no longer govern effectively without clear support from her MPs.

The Age reported that seven Labor sources believed Allan would lose a vote among the party’s 69 MPs. However, one MP rejected the suggestion and insisted the Premier retained the numbers, saying caucus remained behind her.

There is also unease among some MPs that the factional conveners who met on Sunday did not adequately consult parliamentarians before reaching their apparent position.

The mechanics of a leadership change present another obstacle.

Under Labor rules that have not previously been tested in these circumstances, a new leader could be chosen through a combined ballot of MPs and party members, with each group carrying equal weight. The process could take up to six weeks.

If Allan and Carroll both contested, neither could continue performing their current leadership duties while the ballot was under way. An interim leader would have to run the government during a period in which Labor should otherwise be concentrating on the budget, policy announcements and the election campaign.

A drawn-out contest would hand the opposition weeks of political ammunition and reinforce the view that Labor had become consumed by its own survival.

But the case for standing still is becoming increasingly difficult for Allan’s critics to accept.

The most recent Resolve Political Monitor placed the Premier’s likeability rating at minus 36, equal to her lowest result recorded by the poll. Opposition Leader Jess Wilson led Allan as preferred premier by 43 per cent to 24 per cent.

Other surveys have also pointed to a serious deterioration in Labor’s standing.

A RedBridge and Accent Research survey of 5,516 Victorian voters in June placed One Nation first on the primary vote with 27 per cent, followed by Labor and the Coalition on 26 per cent each. The Greens recorded 13 per cent.

An earlier DemosAU poll placed the Coalition on 30 per cent, One Nation on 23 per cent and Labor on 21 per cent. Roy Morgan polling in February also had One Nation narrowly ahead of Labor on first preferences.

Polls are snapshots rather than predictions, particularly in a compulsory preferential voting system. But the trend across several surveys suggests Labor has lost support while One Nation has become a serious factor in a state where it previously struggled to gain traction.

The political contest is no longer simply between Labor and the Liberal-led Coalition.

One Nation intends to contest all 88 lower house seats on November 28, reflecting its belief that frustration over housing, migration, living costs and the major parties has created an opening across outer-suburban and regional Victoria.

The party’s rise does not mean it will convert its polling support into lower house seats. Candidate quality, local campaigning and preference flows will matter. But its emergence further fragments the vote and makes the path to forming government less predictable.

The economic backdrop is also adding to the pressure on Allan.

Victoria’s net debt has risen from $49.7 billion in 2019-20 to about $163.7 billion and is forecast to reach $175.6 billion by June 2027 and $199.3 billion by 2030.

Interest costs are expected to rise from about $8.9 billion to $11.8 billion a year, limiting the government’s capacity to respond to new demands even as it points to a return to operating surplus.

S&P Global has warned of risks to Victoria’s fiscal forecasts, including persistent cash deficits beneath the operating balance. The scale of the state’s borrowing has become one of the central political arguments against Labor after more than a decade in office.

The employment figures have added to that argument. Victoria’s unemployment rate reached 5.1 per cent in June, compared with a national rate of 4.4 per cent.

Wilson has described the combination of debt, unemployment and business costs as a “wooden spoon trifecta”. Business groups have also raised concerns about payroll tax, property levies and regulation, arguing that Victoria risks losing investment to other states.

The government says one month of employment data should not be treated as a verdict on the economy. It has also pointed to measures intended to ease pressure on households, including half-price public transport until the end of 2026 and a 20 per cent reduction in vehicle registration charges.

Those measures provide direct relief, but they have not stopped concerns within Labor about whether Allan can rebuild public confidence before polling day.

The growing leadership pressure may also explain the rush of policy proposals emerging from the Premier’s office.

The Age reported that cabinet would consider a new Victoria Police agency focused on organised crime and informed by national criminal intelligence. The proposal is being considered amid pressure for a royal commission into alleged corruption connected to major construction projects, as well as public concern about firebombings and youth crime.

Another proposal would amend council rate-cap rules to help local governments meet staffing costs. The idea has union support but was quickly attacked by the opposition as another potential burden on households.

Attorney-General Sonya Kilkenny dismissed the leadership reports as “idle gossip” on Sunday and said Allan retained her full support. She argued that the speculation was distracting the government at a time when Victorians expected ministers to remain focused on them.

But public declarations of loyalty are no longer enough to settle the issue.

The position of Ben Carroll is now central.

Carroll briefly nominated for the leadership after Andrews resigned in 2023 before factional negotiations delivered unanimous support for Allan. He became Deputy Premier and has remained one of her most prominent defenders.

He is also regarded as one of the few potential candidates capable of attracting support across Labor’s internal divisions. His refusal to initiate a challenge protects him from being portrayed as disloyal, but it may also leave the party unable to remove Allan unless she agrees to go.

If Carroll continues to refuse to bring the Premier down, Labor’s powerbrokers must either persuade Allan that her position is untenable or accept the risks of forcing a formal vote.

The immediate future may become clearer at Tuesday’s caucus meeting.

Allan could demonstrate that reports of her political demise have been overstated and emerge with her authority intact. She could face a delegation asking her to step aside. Or MPs could move towards a no-confidence vote that would expose exactly where the numbers stand.

What happens next is no longer simply a question about Allan’s popularity.

Labor must decide whether changing leaders four months before an election would restore confidence or confirm the impression of a government in panic.

Carroll must decide whether his refusal to challenge still holds if Allan’s position becomes impossible to sustain.

And Allan must decide whether to fight on if the MPs she leads no longer believe she can win.

The leadership rumours have reached the point at which somebody must act or retreat.

For Victorian Labor, there is little time left for either.