Last Saturday’s Melbourne by-election was both a devastating blow for the Greens and a much-needed morale boost for Labor.

The Greens sets themselves up for humiliation.  In the lead-up to polling day their former federal leader Bob Brown opined that “we’re headed towards a very, very important outcome, a litmus test for the history of Australian politics no less.”  The punters certainly swallowed his hyperbole installing the Greens as clear favourites, with having Greens candidate Cathy Oke at $1.50 compared to Labor’s Jennifer Kanis at $2.25.

Three days after Saturday’s “litmus test,” Ms Oke conceded defeat to Labor in true modern style – via social media platform Twitter – and the Greens were no longer calling the result a “very, very important outcome”.

It might have been close – but make no mistake: the result is a positive outcome for State Labor, and a humiliating loss for the Greens.

The circumstances for the Greens almost could not have been more favourable.

The Greens campaigned on many of their key policies (mostly federal issues at a time the federal Labor Government is hugely unpopular), and received much media attention.

The seat of Melbourne’s demographics  (for example: the state’s highest proportion of rented dwellings – with the second highest median weekly rent; and the state’s youngest median age – partly because of the electorate’s tertiary institutions) are as good as it gets for the Greens.

And it is not as if the Greens have not been able to win lower house seats in other by-elections. A similar set of circumstances occurred in federal politics in 2002 when Stephen Martin, the Member for Cunningham in NSW, resigned.  As in Melbourne, the Liberals did not field a candidate in the ensuing by-election, and the Greens went on to score a 16 per cent swing on primaries and won their first House of Representative seat (although this was returned to Labor in the general election in 2004).  In WA state politics, the Greens won the traditional Labor seat of Fremantle at a by-election in 2009.

It is not unusual for the Greens to perform strongly in opinion polling between elections – especially when polling interviewees know their response to the poll doesn’t carry the weight of actually determining an electoral outcome. The same disparity between opinion poll results and actual outcomes, as the Cunningham by-election showed, is also evident in

So, given the context, many expectations were that the Greens would win Melbourne at the by election. This really means that their 4.5 per cent swing on primaries, and 4.7% in 2PP terms, is not particularly impressive.

On the other, the absence of a Liberal candidate meant it was difficult for State Labor to campaign on the issues that distinguish it from the Government.  It also had to contest the poll in an environment when the ALP is witnessing its lowest federal support in opinion polls for generations. So Labor will be justifiably relieved that the result went its way.

While the absence of the Liberals from the polls make it hard for Labor to claim that the by-election result was in any way a protest against the Baillieu Government, an important aspect of the result is that will undoubtedly provide a morale boost for the Victorian Parliamentary Labor Party and increase the credibility and profile of its leader, Daniel Andrews.  When combined with the Coalition’s one seat majority in both houses of Parliament, and the range of real policy challenges facing the Government, the result will make Labor believe that it can win the next Victorian State Election due in November 2014.

Given that they have remained competitive in the polls since their loss of government in 2010 and will get some “clear air” after the almost certain defeat of Federal Labor next year, last Saturday’s by-election confirms that the next Victorian Election remains very much a ‘live’ race.