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Yara Murray-Atfield and staff

Liberal leader Matthew Guy concedes defeat in Victorian election, party stalwarts lament 'disastrous result'

Victorian Opposition Leader Matthew Guy has conceded defeat in a state election result which has left the Liberal Party picking up the pieces after another crushing loss.

Labor has won a third-straight term and the ABC has projected it will retain a comfortable majority in the lower house.

"A short time ago I did ring Premier Daniel Andrews and offered congratulations," Mr Guy said about 10:45pm.

He said it had been a "disappointing night", but predicted his party would finish with more seats in the lower and upper house than projected earlier in the night.

"On behalf of all Victorians I think it's important now that post-election we come together as Victorians," he told Liberal Party faithful.

It is the second time Mr Guy has conceded defeat in a Victorian election, having led the party for its thumping 2018 loss.

He was replaced after that vote by Michael O'Brien, then returned to the job in September last year.

Mr Guy did not discuss his future at the party, instead using his concession speech to say he was "immensely proud" of his party and the candidates.

He pointed to swings towards his party in traditional Labor heartland electorates, which saw the government's margins in formerly safe seats narrowed, and Nationals' victories in the regions.

The result for the Liberals was worse than many had predicted, with some predicting a minority Labor government.

After a short speech in which he thanked party officials and his family, Mr Guy said the party had "a lot of work to do".

"We know that, but we also know that our time in the sun will come again," he said.

'Soul-searching' needed within Liberal Party

Speaking earlier in the evening, former Liberal Premier Ted Baillieu said it had been a "disappointing" result for his party.

He told ABC Radio Melbourne the party had to "appeal to the centre ground".

"And you've got to win that. And there are all sorts of boxes you got to tick in doing that. And I think we've probably missed some of those opportunities," he said.

He said while the party had cut through on the issue of the Suburban Rail Loop, it had not reached the electorate on other areas.

He said "some of the candidates were a significant hiccup" for the party.

Mr Guy was forced to distance the Liberals from top upper-house candidate Renee Heath over her links to an ultra-conservative church, saying she would not sit with the party when she was elected. Another candidate had to apologise over offensive comments about Indigenous people.

RedBridge political pollster and former Liberal strategist Tony Barry did not hold back on his appraisal of the result.

"The Liberal partyroom is beginning to look a little bit like Jonestown," he said.

"And I suspect we'll keep on drinking the Kool-Aid next term as well."

He said the party had "gone backwards in an election environment where we should have picked up at least 10 seats on a bad night".

He said the party had suffered brand damage with cohorts such as young professional women, and had done particularly poorly in seats that had a high concentration of Asian Australians, such as Box Hill, Ashwood and Glen Waverley.

"It's a disastrous result. 

"There needs to be a lot of soul-searching in the party."

Shadow treasurer David Davis agreed the campaign had failed to reach some communities.

"I think headquarters was not good with multicultural communities ... I think that that is one factor through some of those seats that we've got to really focus on," he said.

The party needed to look "from the base all the way through" to the campaign strategy, he said.

"I think we're going to need to rebuild on a number of fronts."

Many in the Liberal Party have seen John Pesutto as a contender to take over the leadership from Mr Guy.

Mr Pesutto lost the blue-ribbon seat of Hawthorn to Labor in a shock 2018 result, and contended the electorate again in 2022.

But by the early hours of Sunday morning, the race in Hawthorn was too close to call.

Shadow health minister Georgie Crozier said Mr Guy's future as leader was "up to Matthew".

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