The wagons are circling, but John Pesutto is ready for a last stand

Thursday was a big day for the Pesutto household. John’s youngest daughter got her VCE results and the opposition leader failed his own stern examination when the Federal Court ruled he had defamed one of his party colleagues, Moira Deeming.

Pesutto is two years into his job and has achieved what to many appeared is a mission improbable – taking the political basket case also known as the Victorian Liberal Party and turning it into something that resembles a viable government-in-waiting. But for some of his colleagues, a third year with Pesutto as leader is untenable after his missteps exposed the inner workings of their party room to the fierce judgments of Justice David O’Callaghan.

Whatever else Pesutto has done well as Liberal leader, this is the “monumental stuff- up” that, in the eyes of his party detractors, he will never come back from.

Opposition Leader John Pesutto and wife Betty outside the Federal Court.Credit: Eddie Jim

Shadow minister Sam Groth, touted as a possible contender to lead the party, resigned from the frontbench on Friday afternoon in a significant challenge to Pesutto’s already delicate stability.

“It is with regret that, following yesterday’s Federal Court judgment against John Pesutto and his subsequent decision to remain as Liberal leader, I have decided to resign from his front bench,” Groth said in a statement. “In good conscience, I can no longer continue to serve in this role.”

He might not be the last, one MP suggested.

For all the froth and anger of agitating MPs in the hours after O’Callaghan delivered his judgment – and Pesutto’s press conference that showed little contrition or humility – the 54-year-old is still most likely to enter the Christmas break as opposition leader.

Far from resolving this unedifying affair as Pesutto hopes, the court judgment could fester over the summer months before MPs return to parliament in February.

Kim Wells, a former treasurer and state party veteran, was more sad than angry on Friday as he reflected on the “embarrassing” episode.

Moira Deeming (centre) after her court win on Thursday.Credit: AAP

“The Deeming case has wrecked relationships and friendships, and in many cases, these will never be mended,” said the Rowville MP, who played a protracted and ultimately failed peacemaker role in the Pesutto and Deeming dispute. Wells had also been courted in October to consider a tilt for a leadership role, before those rumblings fizzled.

“The Liberal Party needs to rebuild, and an essential first step would be to readmit Moira Deeming back into the party room because a court has proven that she did nothing wrong,” he said.

His message underlines the impossible task any leader would face in trying to unify a deeply fractured party.

Pesutto, whether stubbornly or bravely, is not for turning. Having been dragged through a bruising court battle initiated by Deeming and facing a significant financial burden from the $300,000 damages bill and likely costs order, he has no appetite for bringing her back or appeasing those who want him to. He says his mind is focused on the main game.

“Two years ago this month, I took on the responsibility of being Victoria’s opposition leader and alternative premier,” Pesutto told journalists on Thursday. “I have to fight every day to prove I’m worthy of this role. It’s an enormous responsibility.”

Sam Groth resigned from the frontbench on Friday.Credit: Eamon Gallagher

Pesutto framed his resolve to expel Deeming from the party room as driven by a desire to lead an electable, mainstream Liberal Party. O’Callaghan noted that while Deeming’s views and role in the Let Women Speak rally on the steps of parliament, which was gatecrashed by neo-Nazis last March, may be controversial and polarising, that did not mean she had a bad reputation for being “hateful”.

For Pesutto, Deeming’s full-throated advocacy on sex-based rights in the short few months she spent as a Liberal MP ran counter to the essential values he was trying to bring to the party.

“Mr Pesutto is a progressive, inclusive, modern liberal, who believes that we are free to be whoever we want to be, whoever we want to love and whatever identity we want to adopt,” written closing submissions from Pesutto’s legal team said.

Having endured the humbling experience of losing his seat of Hawthorn live on air while sitting on an ABC election night panel in 2018, Pesutto knew the party had to “connect with as many people across Victoria as possible” to be electable in 2026.

“It was a searing experience losing my seat in 2018,” Pesutto wrote in his second affidavit to the court. “I felt the party lost seats like Hawthorn because we had, as a party, drifted from the mainstream. In the intervening years before I won re-election, I spent time in deep reflection about my values and the future of the party. I felt the party needed to become and be perceived to be more mainstream.”

The most recent polls suggest that, despite the protracted distraction of the Deeming affair, Pesutto and the Liberal Party are on the right track.

A September survey by the Resolve Political Monitor for The Age, released last month, found Pesutto was leading as preferred premier for the first time. The Coalition’s primary vote reached 37 per cent, while Premier Jacinta Allan’s Labor government flat-lined on 27 per cent.

On Friday, former leader Matthew Guy provided a succinct summary for wavering colleagues. “He’s doing a good job, we’re well ahead in the polls,” he told ABC Melbourne radio. “It’s time for everyone to shut up and do their job and stop commenting on his.”

But Pesutto’s party room has never fully shared this view. The parliamentary party of 30 is roughly divided into three groups of equal membership. One of those is squarely behind Pesutto, and one-third firmly against.

Bev McArthur, one of those against Pesutto, described his leadership as untenable. Pesutto laughed it off, but understands how fragile his situation remains. He won the December 2022 leadership ballot by one vote and has survived this long, in part because his rivals aren’t willing to park personal ambition and swing behind an agreed challenger.

O’Callaghan, in Thursday’s judgment, found Pesutto’s “urgency” to respond to Deeming’s role in the rally seemed to be “driven by more of a fear of the political damage that would be inflicted upon his fledgling leadership by the then Premier [Daniel Andrews] than by his professed concern that the party and the parliament would be brought into disrepute”.

This political anxiety could be heard in two clandestine recordings of meetings between Deeming and the leadership. Andrews managed to win both sides of the street, Pesutto told Deeming in February 2023. “We kind of get ourselves caught in this no man’s land, and we lose both.”

In the other recording — surreptitiously taken the day after the Let Women Speak rally — Pesutto told Deeming he would seek her expulsion: “It’s not personal. I’m putting the team first. The damage to the team and our prospects is too severe.”

The court ruled that Pesutto “subjectively believed” it was in the public interest to explain why he was seeking Deeming’s expulsion, but O’Callaghan found this was not a reasonable belief. This is why Pesutto could not claim public interest as a defence for defaming her as a Nazi sympathiser.

Deeming was vindicated by the court decision but remains furious at the “relentless and remorseless campaign” against her. “I was never going to let it go unchallenged in this state and under my Liberal Party logo,” she said in the hours after her victory. ”I still believe in this party. If you look at the Liberal Party platform, they are good values.”

But the possibility of Deeming returning to the party room seems remote.

McArthur, a staunch Deeming supporter, said Pesutto should be welcoming her back. On Friday, she told ABC Melbourne radio that while everyone makes mistakes, Pesutto was yet to rectify his and urged him to call a spill.

“The first thing he could do is say, ‘I got it wrong. I made a mistake,’” McArthur said.

“If he’s so confident about his position, then he can easily call a meeting of the parliamentary party and put his case forward and declare all positions vacant.

“His assertion that he is the best person to lead the party can be tested … There are many talented people in this party.”

By the time MPs return from their summer break, the byelection campaign for the winnable seat of Prahran will be well advanced and the federal election just around the corner. The federal party will be furious if another round of bloodletting stains their prospects in Victoria.

Federal Opposition Leader Peter Dutton made this clear back in March 2023, when he sent a text message to Pesutto before the Aston byelection. “John for the sake of Aston could we pls put this issue to bed today. No more media pls,” he wrote.

Dutton will get no argument from Pesutto on this. But for the Victorian Liberal Party, the Deeming affair refuses to sleep.