Victorian Labor has secured another seat in the lower house, as a Liberal MP about to vote on the new leader has declared his party is facing an "existential crisis".
Labor's victory in Preston takes the party's numbers to 54 in the legislative assembly, compared to the Liberals' 18.
Two seats are still too close to call — Pakenham and Bass — but there is every chance Labor will equal the same result as it did in the 2018 "Danslide".
While the Coalition also won about the same number of seats as at the 2018 vote, the Liberals lost ground as its junior partner the Nationals picked up votes.
The Liberal defeat was the third-straight loss the party has suffered in Victoria.
The Victorian Electoral Commission (VEC) conducted an electronic preference distribution for the seat of Preston in Melbourne's north on Wednesday, confirming Labor as the winner.
While Labor's Nathan Lambert was ahead in much of the count, the ABC labelled the seat in doubt due to the unexpected surge in votes for independent candidate Gaetano Greco.
The completed preference distribution for Preston showed Mr Lambert had secured more than 52 per cent of votes, in a contest against the Greens.
The ultra-marginal seats of Bass and Pakenham are expected to be finalised on Thursday, the same day as the Liberals vote for a new leader.
Premier Daniel Andrews told ABC Radio Melbourne the election "was certainly a contest of leadership".
"I think the alternative government and our political opponents made it that, being very singularly focused more on me than perhaps their own plans for the future," he said.
Mr Andrews faced questions on the overwhelmed health system, delayed infrastructure and integrity in a wide-ranging interview with the Drive program.
He repeated criticisms from the campaign that by putting Labor last on how-to-vote cards, the Liberal Party had preferenced "people who've got, on any reading, any reading of it, pretty extreme views, everything from racism, and indeed, much worse".
Liberal MP says party hasn't 'moved forward'
James Newbury, one of the only Liberal MPs to gain ground in his seat of Brighton, told the ABC the party failed to sell its economic credentials to voters at the recent state election.
"I think that we haven't sold that message. We haven't given that. We haven't told the community that that's our priority,'' Mr Newbury said.
"We are facing an existential crisis in our vote, because we haven't generationally changed. We haven't moved forward.''
After yet another thumping at the hands of Daniel Andrews' Labor, the Victorian Liberals are once again engaged in soul-searching.
It is also searching for a new leader, with Hawthorn MP John Pesutto and Berwick MP Brad Battin both seeking the top job.
The race for the leadership is extremely close and there is a worry it could further divide the party.
Some see Mr Battin as a better option because he represents the outer suburbs whereas Mr Pesutto hails from Melbourne's more affluent areas.
But others believe Mr Pesutto carries more intellectual weight and offers a broad appeal to traditional small "l" Liberal voters as well as moderate Victorians.
Mr Newbury remained tight-lipped on who he would support at Thursday's leadership ballot.
Liberal Party woes not just in Victoria
The demographic numbers are ugly for the Liberal Party, with young voters and women turning away from the party — and not just in Victoria.
A recent ANU analysis of May's federal election found just a quarter of people under 40 were voting for the Coalition — the lowest level of support recorded in the study's 35-year history.
It was even lower for people under 25, and just a third of female voters voted for the party.
Mr Newbury, who held the shadow equality portfolio, said areas in which the Liberals must improve were equality and the environment.
He did not back gender quotas, despite saying the party needed to have a serious conversation about its MPs better representing the community.
Mr Newbury refused to blame former opposition leader Matthew Guy for leading the party into a second-straight annihilation at the Victorian polls, claiming the party's crisis was not limited to the state.
"We've seen decisions made federally which go against the grain of what Australians now believe in, and we can't pick candidates who are perceived to cut against the grain of equality and values of our community, that damages us exponentially,'' Mr Newbury said.
During the last week of the campaign, Mr Guy declared that upper house candidate Renee Heath — who was elected at the poll — would not be allowed to sit in the party room due to her links to the controversial City Builders church and its views on homosexuality.
But Mr Newbury refused to be drawn on Ms Heath's preselection or Mr Guy's decision to exile her from the party room.
Ms Heath will be allowed to attend the party room and both leadership contenders have backed this move — ultimately it is the party room, not the leader, who decides.
John Pesutto and Brad Battin battle for Liberal Party leadership
After four years in the political wildness, having lost his seat in 2018, Mr Pesutto was formally declared as the winner in Hawthorn on Wednesday.
He said the leadership vote was going to be close and urged the party to rally behind whoever was the victor.
"I don't see it as division so much as a healthy contest of ideas,'' Mr Pesutto said.
He said the party must undergo serious reform to be ready to govern in 2026, which included the party's campaign tactics and administration.
"There's a massive skills vacuum on that side,'' he said.
"On policy. I'm a big believer that the party needs to be a broad-based organisation that reflects not only liberal and progressive views, but conservative views as well. We've always been that when we've been successful, and I believe I can do that."
Mr Battin declined an interview because he wanted to respect the party room process.
But he said, in a short statement; "after the election of the Liberal Party Leadership, my focus will be on ensuring as a party our focus is on rebuilding our brand and increasing the trust in the Liberal Party as we move on from the electoral results at the recent state election."
Richard Riordan, who has put his hand up to be the Deputy Leader of the Victorian Liberal Party, said the Opposition must spend four years talking to the community and understanding what their concerns were, rather than waiting for an election.
"We need a whole state approach,'' Mr Riordan, who is backing Mr Battin for leadership, said. "We need to make the case over four years."
