Premier Jacinta Allan and her deputy, Ben Carroll, face growing speculation of an imminent leadership challenge, after they went to ground over a teacher’s strike and the state’s unemployment rate climbed above 5 per cent for the first time since the pandemic.
Victoria’s unemployment rate in June hit 5.1 per cent, becoming the first mainland state to go above 5 per cent since the end of Covid lockdowns in October 2021.
The state’s jobless rate now is well above NSW (4 per cent), Western Australia (4.2 per cent), Queensland and South Australia (4.3 per cent) and the national rate of 4.4 per cent; the 0.7 per cent gap between the Victorian and national unemployment rate is the largest it has been in more than a decade.
The new figures come as state Labor MPs renew chatter of a leadership challenge against the Victorian Premier four months out from the November 28 election. There is growing talk of a cross-factional delegation going to Ms Allan to convince her to stand down, or to Mr Carroll to urge him to challenge, when parliament returns next week.
The Australian revealed on Thursday that MPs were speculating about a fresh challenge after a two-day caucus retreat in Ballarat that left them unconvinced that the Premier and her team were adequately addressing the government’s political problems, including the CFMEU corruption scandal.
Ms Allan was in Adelaide on Thursday for Labor’s national conference, while Mr Carroll did not front reporters, despite tens of thousands of teachers and support staff holding strikes after rejecting the government’s latest pay offer.
Mr Carroll – the Education Minister, who it is understood was sick on Thursday – said in a statement that “today’s disruption is disappointing”. He said the government would continue to work with the Australian Education Union on a deal.
Some MPs in Ms Allan’s Socialist Left faction who were previously against a change have become supportive of a change, but it remains unclear whether the numbers are there to topple the Premier.
MPs who aren’t supportive of a change pushed back against the assertion that the plotters had the numbers, saying there had not been a proper count.
The renewed speculation came as Labor MPs returned from the two-day caucus conference in Ballarat, reporting a sense of malaise among their colleagues.
Several MPs said they were not convinced by presentations given by Ms Allan and her chief of staff, Damian Karmelich, during the caucus retreat.
According to multiple attendees, Mr Karmelich argued that the government’s rollout of policy commitments was tracking much as it did before the 2022 election. He also delivered an extended argument that Labor needed to lean into public anxiety about artificial intelligence.
“We need to talk about something people aren’t talking about, but they’re anxious about,” Mr Karmelich reportedly said.
It left some MPs with the sense that the government wasn’t serious about responding to the political problems that have been raised by voters, including the infiltration of organised crime on taxpayer-funded construction.
After the retreat, there has been widespread venting within Victorian Labor about Mr Karmelich, who The Australian previously reported has been criticised by ministers over his “controlling” style.
However, some still credit him with injecting a sense of discipline back into the government after his appointment in 2025.
Anthony GallowayVictorian political editor