The Victorian Liberal Party put off the decision as long as it decently could, but on Tuesday night state director Damien Mantach announced what had long been expected, that the party would not contest the Niddrie byelection caused by the retirement of the state’s deputy opposition leader Rob Hulls.

The byelection — to be held on March 24, the same day as the Queensland election — will now be fought between Labor, the Greens and whoever else puts their hand up. Niddrie, in Melbourne’s middle north-western suburbs, is relatively poor Greens territory (they managed 7.8% last time), so there no reason to think Labor will be troubled.

The trouble instead is for the Liberals, who are facing considerable criticism for the decision. Last week The Age editorialised that it showed “a pusillanimous attitude”, and yesterday’s report quoted “a Liberal source” describing it as an “act of rank cowardice”.

It’s not hard to see why. Last year in relation to nearby Broadmeadows, I said that: “No party these days should feel guilty about not contesting a seat that needs a 21% swing.” But Labor’s margin in Niddrie is only a third of that — just 6.9%. If a government doesn’t try to win a seat like that, it’s not clear where it would ever try.

But only does the Liberal Party (like its opponents) have form on this issue, it even has form in Niddrie itself. Back in 1996 a byelection was scheduled there when Labor member Bob Sercombe transferred to federal parliament. The Liberals refused to field a candidate, even though the margin at the time was only 3.6%, giving Hulls the victory unopposed (although premier Jeff Kennett subsequently called an early state election before he took his seat).

More interesting is the way that Ted Baillieu’s position has changed.

All reports say that the rank-and-file and the administrative wing of the party (controlled by Baillieu’s opponents) were in favour of running, but the premier successfully argued against it. Last time this was argued out, in relation to Albert Park in 2007, they were on the reverse sides; Baillieu wanted to run, but the Kroger-Costello group was against it.

That partly reflects the change of being in government. For an opposition leader, a byelection is an opportunity; for a premier, it’s a nuisance. The change, of course, has also made a difference to Baillieu’s influence: in 2007 he was embarrassingly rolled by the administrative committee, whereas this week he got his way.

But the decision will upset a lot of people. Historically it’s a wasteland for them, but the Liberals have been mounting something of a comeback in the northern and western suburbs in recent times. Although the swing in Niddrie in 2010 was only 4.3%, neighbouring Derrimut, Essendon and Keilor all swung by more than 9%, and the party won an extra seat in each of the two upper house regions on that side of the city.

As class comes to carry less weight in political terms, ideology carries more, so it’s not surprising that the area is a stronghold for the party’s hard right. That also may have something to do with the premier’s reluctance to enter the contest.

Either way, however, it shows a divergence of interest between party and government. The government wants a clear run at governing, free from distractions and unnecessary risk. But the party, to the (limited) extent that it thinks about its long-term future, needs to be building its brand in less-friendly areas, exploiting opportunities for growth and development. Most of all, it needs to remember that it and the state are separate entities, and it does not exist just to serve the premier’s interest (or vice versa).

Democracy requires choice, and a party that gets into the habit of denying the voters a choice is failing in its primary duty, however convenient that might be for its elected representatives.

Baillieu has often professed his admiration for Kennett, but in office he been careful to steer clear of many of his predecessor’s mistakes. It’s sad to see him now following him in his disdain for democracy.