Labor on brink of losing state of Victoria

Most analysts are expecting Opposition Leader Ted Baillieu to emerge as the victor. Photo / Getty Images

CANBERRA - Victoria's 11-year-old Labor Government remains on the brink of losing power to the Liberal-National Coalition following a strong swing to the right in the weekend's election.

Although caretaker Premier John Brumby has refused to concede defeat and yesterday held on to hopes of retaining a minority Government in a hung parliament, most analysts are expecting Opposition Leader Ted Baillieu to ultimately emerge as the victor.

Electoral officials have begun counting more than 550,000 pre-polling votes that will decide which party rules the State, beginning with the key seat of Bentleigh, where the incumbent Labor MP is trailing her Opposition rival.

The election saw a swing of more than 6 per cent against Labor, a savaging led by Melbourne voters in which almost all its losses went to the Coalition parties.

The Greens did not gain the ground that polling had predicted, failing to win a Lower House seat, but is likely to keep its seats in the Legislative Council. The Greens had hoped to repeat their success in the August federal elections, in which Melbourne lawyer Adam Bandt became the party's first MP in Canberra.

Although the final result will not be known for days, it was clear that voters had tired of more than a decade of Labor rule, and expressed their anger over rising costs - especially for electricity and water - transport problems, services and policing.

"I know that we have been sent a loud and clear message," Brumby said. "I have heard that message. Our Government has heard that message."

But with the Coalition close to winning the 13 seats it needs to take power, at least two Labor ministers losing their seats, and trends suggesting that pre-polling votes will not turn to Labor, Brumby's future looks grim.

State Nationals Leader Peter Ryan said yesterday that Labor had acknowledged it did not have the numbers to form government and should concede.

"I think [the election] has destroyed the legitimacy of this Government," he said. But Baillieu has resisted claiming victory. He said every vote would count in determining the final outcome but that the votes already counted had shown a stunning result.

Former Labor Premier Steve Bracks, who defeated the Coalition in 1999 and left office undefeated in 2007, handing power to Brumby, yesterday told Sky News that he did not believe Labor could win a majority, although a hung parliament remained possible.

"This was a big ask for Labor. At no other time in history has Victorian Labor ever won a fourth term, so we were going to create history by winning and we could still get close."

But the ABC election computer yesterday gave Labor 37 seats to the Coalition's 44, and predicted that Baillieu would become Premier with 46 seats to Labor's 42.

A Baillieu victory would give Australia its second Coalition Government, with others likely to replace unpopular Labor administrations in New South Wales and Queensland.

It would make life harder for Prime Minister Julia Gillard, who needs the agreement of the states on such key reforms as health and management of the Murray Darling Basin.