Regrettable references and claims of ‘rigged’ election laws: why this week has reignited Jacinta Allan spill rumours

Jacinta Allan faced three major tests this week. The way she handled them has left some of her colleagues speculating about a possible leadership change just months out from the Victorian election.

The first came on Monday, as the premier responded to a parliamentary inquiry that six months ago recommended sweeping reforms to Victoria’s integrity laws.

Allan agreed to give the Independent Broad-based Anti-corruption Commission (Ibac) follow-the-dollar powers to investigate the spending of public money by private contractors and subcontractors, as well as a broader definition of corrupt conduct, which will make it easier to launch investigations and hold public hearings.

But for some Labor MPs, it felt like too little too late.

Ibac has been seeking many of these powers for a decade and it comes almost two years after allegations of union corruption on Victorian government projects first emerged, followed by a steady stream of damaging headlines about bikies, drugs and strippers on construction sites.

If Labor wins the November election, the reforms won’t be legislated until late 2027. If the opposition wins, it will introduce follow-the-money powers in December but is yet to commit to changing the definition of corruption.

Several Labor MPs, unauthorised to speak publicly, say the premier should have acted months ago – particularly after the release of a report that suggested union corruption could have cost taxpayers up to $15bn.

“It could have cauterised an issue that was causing us to bleed votes,” one said.

The second test involved Victoria’s donation laws – or rather, the lack of them. Since the high court struck down an entire section of the Electoral Act in April, removing the previous cap of $4,970 over a four-year term, there have been no limits or disclosure requirements on political donations.

Electoral laws have traditionally been negotiated across party lines to avoid accusations that one side is rewriting the rules for their advantage. But Allan said Labor was forced to strike a deal with the Greens and crossbench MPs – imposing a $7,500 donation cap per donor over four years, reintroducing disclosure measures and increasing public funding – after negotiations with the Liberal leader, Jess Wilson, and shadow attorney general, James Newbury, stalled.

It opened a door to fierce criticism from the opposition, who called the bill “rigged”, “dodgy”, “shonky” and a “dirty racket” during debate. The deputy Liberal leader, David Southwick, went even further, accusing the government of attempting to “steal an election”.

The Coalition claimed Labor would continue to benefit from union affiliation fees and increased administrative funding. But union fees can’t be used for campaigning and the Coalition also benefits from an increase in administrative funding.

Despite the bill passing on Friday morning following a marathon debate – the issue won’t go away – the independent candidate Paul Hopper, who successfully challenged the original laws alongside Melissa Lowe, said he had engaged lawyers to challenge the new laws, while the Coalition is also considering its legal options.

Climate 200 founder Simon Holmes à Court argues the caps will disproportionately disadvantage challengers. Independent candidates Sophie Torney and Shima Ibuki, who received significant donations from Climate 200 during the limbo period when no donation laws were in place, both confirmed they will now have to return those funds or risk breaching the law.

“This leaves my campaign bankrupt, while the major parties are filling their election war chests with taxpayers’ money,” Ibuki said.

The third test for Allan involved revelations that Luba Grigorovitch, a newly appointed minister, had written 33 character references, some of which she now regrets, including for a taxi driver who assaulted female passengers, two men accused of domestic violence, a supporter of former Iranian supreme leader Ayatollah Ali Khamenei and a man fined for selling counterfeit clothing.

The opposition has relentlessly pursued the matter in question time, tried to connect it to Grigorovitch’s friendship with former construction union leader John Setka and called for her to be dumped from cabinet.

As one Labor MP put it privately: when a Liberal candidate wrote a character reference for a sex offender, he was stripped of his endorsement. They wanted stronger action against Grigorovitch, but the premier has said the matter has been addressed after her minister for youth, carers and volunteers vowed never to write another character reference.

Several MPs said the government was struggling to escape a cycle of damaging headlines.

“Week after week after week there’s a new drama,” one MP said.

Another said the premier had promised the cost-of-living focused budget last month would be the “circuit breaker” it needed but “this just hasn’t happened”.

Combined with poor polling, Allan’s weak personal ratings and rising support for One Nation, some MPs fearful of losing their seats say her leadership is again at risk, despite a seeming lack of a viable candidate that could bring the party’s left and right factions together.

“It’s not too late,” one MP said.

Benita Kolovos is Guardian Australia’s Victorian state correspondent