Allenby, who fired a course-record 63 in the opening round at Moonah Links, remained at 9-under 135.
Adam Scott shot a 73 and was four shots off the pace at 5-under.
Five players shared third place at 4-under, including two-time winner Aaron Baddeley, Rod Pampling, Nathan Green, John Senden and Paul Sheehan.
American Spencer Levin, who finished Thursday in second place, had a 5-over 77 on Friday and slipped to 3-under and a share of eighth place.
Hot and windy conditions angered many players as they tried to control their putting and approach shots on some of the faster greens.
Allenby, who claimed inflammation in his right hand was so bad four days before the tournament that he could hardly pick up a golf club, said he accepted the difficult weather conditions.
'I knew I had to be patient and accept the bad shots and make a few putts,' he said.
Stephen Leaney refused to sign his card for a 74 in protest and was disqualified.
He had a bogey and playing partner Peter O'Malley had a triple-bogey at the par-3 12th, prompting tournament officials to start lightly watering the green for every subsequent group to negate the impact of the strong northerly wind.
O'Malley had a par putt of less than a meter that was caught in a wind gust and rolled three meters past the pin. After he marked and replaced the ball, it rolled further from the hole. He asked officials if he could replace the ball again, but the request was disallowed.
'You can imagine how we felt,' said Leaney. 'We'd got the rules officials over to make a decision and then they recognize what was going on and water it.'
O'Malley, who made the cut at 4-over, declined to comment.
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