Vic ombudsman to probe Labor allegations

The Victorian ombudsman can investigate allegations Labor MPs rorted taxpayer-funded allowances at the last state election, the state Supreme Court has confirmed .

Ombudsman Deborah Glass had asked the court to clarify whether her office had the power to investigate the fraud allegations, as requested by the upper house in November.

Supreme Court Justice Anthony Cavanough on Friday said legislation gave the Ombudsman's Office the jurisdiction required to investigate a referral by the Legislative Council.

The court was asked in February to rule on whether the ombudsman could investigate Labor's use of electoral staff to run its state election campaign.

That was prompted by an internal report that found Labor's use of electorate office funds to pay 26 staff for two days a week of campaigning at the 2014 state election would not "pass the pub test" among voters.

The upper house voted in November to ask Deborah Glass' office to investigate whether Labor had breached the rules.

Special Minister of State Gavin Jennings then wrote to Ms Glass to say her office didn't have the power to do so.

Ms Glass thought she did.

She asked the Supreme Court to clarify whether the investigation was within the ombudsman's jurisdiction to settle the "genuine controversy" about her powers of office.

The state opposition has welcomed Friday's ruling, the reasons for which Justice Cavanough has outlined in a 139-page document.

"This decision is a win for accountability over the efforts of the government to conceal the truth," said shadow attorney-general John Pesutto.

"What happened before the last state election when the ALP misused taxpayer-funded resources for the purposes of winning an election was a disgrace. It was wrong, and it was a massive rort."

The government has not yet commented on the Supreme Court ruling.