Ted Baillieu set to take power in Victoria

TED Baillieu is set to become Victoria's 46th premier after the Coalition pulled ahead in the crucial marginal seat of Bentleigh last night.

Ted Baillieu emerges from a morning swim with the Brighton Icebergers yesterday. Picture: Aaron Francis

TED Baillieu is set to become Victoria's 46th premier after the Coalition pulled ahead in the crucial marginal seat of Bentleigh last night.

This all but guaranteed victory against John Brumby and his 11-year-old Labor government.

While the Coalition would not declare victory last night and Mr Brumby refused to concede defeat, it seemed almost impossible for Labor to retain government, with the Liberals poised to win a 45th seat last night.

The electoral punishment meted out to the Brumby government, widely considered Australia's best economic manager, will deepen the identity crisis facing Labor in all jurisdictions as it wrestles with how best to counter the perceived threat of the Greens while defending its political middle ground.

Mr Baillieu's likely triumph was built on a high-risk strategy of preferencing Labor before the Greens, a move that has increased pressure on Labor to reconsider its accommodation of far-left voters.

A change of government in Victoria would also make it more difficult for Julia Gillard to secure home-state backing for her national reforms in health, water and the rollout of the National Broadband Network.

Victorian Nationals leader Peter Ryan, who would be deputy premier in a Baillieu government, refused to support an "opt-out" approach to the NBN, as favoured by the Brumby administration and the federal government.

With 96 per cent of the vote counted in Bentleigh, including 3225 pre-poll votes, Liberal candidate Elizabeth Miller was ahead by 423 votes.

Sitting Labor MP Rob Hudson admitted the results were "not promising" but vowed to wait until all counting was verified.

The Victorian Electoral Commission will resume counting absentee and postal votes today in Bentleigh, while also focusing on three other close seats of Ballarat East, Macedon and Eltham, which are all expected to be held by Labor.

Mr Brumby refused to concede defeat on the basis that 550,000 pre-poll votes were still to be counted and could change the outcomes in some seats.

However, The Australian understands that Mr Baillieu has already sounded out former federal MP Petro Georgiou about becoming his chief of staff, should the Coalition form government.

The Victorian election capped a bad weekend for Labor, which started when a Galaxy poll in Brisbane's Courier-Mail newspaper found support for the Bligh government had plunged to 28 per cent.

Then at the South Australian party conference, Labor's internal policy divisions deepened when the state branch endorsed same-sex marriage - a position that moves it towards the Greens but puts it at odds with Julia Gillard and the factional powerbrokers who elevated her to the Labor leadership.

NSW Labor is also in turmoil, with party president Bernie Riordan expected to quit in the next 48 hours following Premier Kristina Keneally's declaration yesterday that she no longer has confidence in him. Mr Riordan had failed to convince the Electrical Trades Union, which he heads, to support Labor candidates at the March election.

Melbourne's eastern and southeastern suburbs delivered a huge swing against Labor, giving the Coalition almost all of the 13 seats required to wrest government from Mr Brumby.

As counting continued, the Prime Minister refused to comment on the result, while Tony Abbott said it showed the Labor brand had become "toxic".

Queensland Premier Anna Bligh said it could be time to rethink preference deals with the Greens. Ms Bligh, who is Labor's national president, said the party would learn a lot from the devastating election swing against one of its better-performing state governments.

"We will certainly be having a look at the lessons out of the Victorian campaign, and questions about preferencing will have to be part of that," she said.

Ms Bligh said national deals on hospital funding and school curriculum standardisation could be hit if a loss in Victoria was followed by Labor losses in next year's NSW election and her own Queensland poll, due in 2012.

NSW Opposition Leader Barry O'Farrell, who had previously not ruled out putting the Greens ahead of Labor in the NSW election, yesterday noted the success of Mr Baillieu's approach. "Notwithstanding the difference in voting systems, I think Ted Baillieu's decision to put the Greens last clearly has lessons for Liberal parties across the country," Mr O'Farrell told The Australian.

He said Mr Baillieu's success, along with that of Liberal West Australian Premier Colin Barnett, showed that the nation was moving to a centrist conservative position in the tradition of Liberal Party founder Robert Menzies.

The potential appointment of Mr Georgiou as Mr Baillieu's chief of staff would support this. Before entering parliament he worked for Malcolm Fraser when he was prime minster, and served as the Victorian division's state director. He is a noted moderate who stood up to John Howard over the his government's treatment of asylum-seekers.

The appointment would be a massive snub to Michael Kapel, who has worked in the role for Mr Baillieu for the past four years and had been guaranteed the position in government if they won the election.

In the count, the Victorian Coalition claimed the seats of Gippsland East, South Barwon, Seymour, Prahran, Mount Waverley, Mordialloc, Mitcham, Gembrook, Frankston, Forest Hill, Carrum and Burwood.

While refusing to concede defeat, Mr Brumby admitted it would be "extremely difficult" to win government. "I'm as keen as anybody to get a clear result to the election, but to be fair we've got 550,000 (pre-poll) votes that haven't been counted," he said.

Mr Baillieu yesterday made a brief appearance early in the morning, going swimming in Brighton, before bunkering down in briefings. "Feeling pretty good," he said.

Additional reporting: James Massola, Jamie Walker, Imre Salusinszky, Peter van Onselen