The Liberal Party in crisis

The Liberal Party, since its formation in 1946, has been the political mouthpiece of the Australian ruling class. The federal election destroyed much of its electoral heartland and puts the future of the party as a united entity in doubt. In city after city, seats that the Liberals (and their conservative antecedents) had held for decades fell to their opponents.

In Perth, the party lost five seats, four to Labor and one to an independent, and now holds just two out of the city’s eight seats, suffering two-party swings of 10-15 percentage points. In Brisbane, Labor and the Greens took two seats off it and in Adelaide Labor took one.

The defeats in Sydney and Melbourne will likely prove the most difficult for the Liberals to recover from because it was here that the Liberal base most obviously split.

In Melbourne, the Liberals lost four seats, including Kooyong, the bluest seat of all, with a 10-point two-party swing against federal Treasurer Josh Frydenberg. Kooyong, since its formation in 1901, has known nothing but conservative representatives, including Liberal Party founder and long-time Prime Minister Robert Menzies and former Liberal leader Andrew Peacock.

Goldstein, covering Brighton and Sandringham in Melbourne’s inner south-east, held by Tim Wilson, was another Liberal loss on another two-party-preferred swing of 10 points. This has been Liberal territory since its formation in 1984. The result of these and other losses in Melbourne is that the Liberals have no MPs anywhere within 25 kilometres of the CBD.

In Sydney, two-party-preferred swings of anywhere between 5 and 15 points resulted in Liberals losing five seats across the wealthy eastern suburbs, north shore and northern beaches.

The richest electorate in the country, Wentworth, held by conservatives almost without a break since federation, voted out Liberal incumbent Dave Sharma. Just over the harbour in North Sydney, Trent Zimmerman lost what has traditionally been a very safe Liberal seat, one of just two—along with Wentworth—never to have been held by Labor.

On the northern beaches, two-term Liberal incumbent Jason Falinski lost Mackellar, a Liberal seat for all but two months of its 73-year history, while independent Zali Steggall held on to Warringah, a seat she took from Tony Abbott in 2019. The Liberals now hold just seven of the 26 seats in the Sydney basin region, all in the far northern suburbs, the southern suburbs and in Penrith far to the west.

It was in Sydney and Melbourne that the teal independents made the most of Liberal failure (Warringah, Kooyong, Mackellar, North Sydney, Goldstein and Wentworth). In Perth’s wealthy beachside western suburbs, another teal independent, Kate Chaney, achieved the same in Curtin, a seat held by the Liberals for almost its entire 70-year existence.

These results spell disaster for the Liberals for several reasons. First, losing such heartland seats makes it more difficult for them to win the next election. Part of it is purely arithmetic. With the Coalition likely to hold just 59 seats, they have a long way to go to get to the 76 seats they need to form a majority government in 2025. Even in 2007, when the Howard government was swept out of office by Kevin Rudd’s Labor Party, losing 22 seats, the Coalition still held 65 seats. The Liberals and Nationals now hold just four of the country’s 45 inner-metropolitan seats. This is not just a federal problem; the NSW Liberal government could well face similar challenges at next March’s state election.

While in no case did the Liberals’ two-party-preferred vote fall below 46 percent in contests with the teals, putting them in striking distance of regaining those seats, the experience of independents such as Steggall and Wodonga-based independent Helen Haines, who now hold their seats on a 60 percent two-party-preferred vote, is that independents can consolidate and increase their margin in subsequent elections and prove hard to dislodge.

The success of the independents has torn open the divisions in the Liberal Party between the right factions and so-called moderates.

The right has been making ground since the election of the Howard government in 1996. Howard and his allies did much to destroy what were then called the party’s “wets”. Howard may have lost in 2007, but Tony Abbott, who won government in 2013, carried on a similar hard-right agenda. Supposed moderate leader Malcolm Turnbull hedged his bets, and Morrison’s election as leader in 2018 confirmed the ascendancy of the right. The result is a socially reactionary parliamentary caucus, reflecting the prejudices of the party membership at large. They are backed by News Corporation’s tabloids, the Australian newspaper, Sky News and the capitalists from the resources sector.

The success of the teal independents was in part a revolt by traditional Liberal voters at the party’s socially reactionary agenda, in particular its sexism, its hostility to environmental measures and its blatant disdain for parliamentary process.

The Dutton-led party will be hard pressed to respond effectively to the loss of its traditional heartland in the wealthy areas of the big cities. One option pushed by the right, encouraged by a ferocious News Corporation campaign, is to abandon them and to focus the party on the more distant suburbs, the peri-urban areas, the regional towns and rural electorates, promoting a right-wing program aimed at “aspirational voters” and social reactionaries.

Dutton has stated that he will not take the party down that road and will maintain it as a “broad church”, with moderates and the right collaborating. However, given his entire record as a right-wing head kicker and the need to differentiate the Liberals from the Labor government and protect the party’s right flank from the likes of One Nation and the UAP, it is unlikely Dutton will resist the temptation to push the party rightwards.

The problem with doing this, however, is that it offers little chance of winning sufficient seats to form government. Australian elections are won and lost in the six capital cities, which—together with nearby cities such as Newcastle, Wollongong, Geelong and the Sunshine and Gold Coasts, plus Canberra—account for the big majority of seats.

There is no huge swathe of seats or electoral college voters as there is in the United States in far flung middle-sized towns where political life is dominated by the Republicans, nor a skewed electoral system that gives these conservative areas outsized political representation. In the rural areas, the Liberals and Nationals already hold 29 of the 38 seats, giving them little opportunity to grow much there.

Nonetheless, the prospect that the Liberals could respond to their defeat by repositioning themselves on the hard right should be concerning for the left. A right-wing Dutton-led Trumpian party could attract the far right, which at this election won around 12 percent of the national vote. The Nationals have for years experienced far-right infiltration and have for the most part rebuffed it. A much more clearly right-wing Coalition might in future choose not to do so. The NSW branch of the Liberals has for decades had a substantial right-wing presence (the “uglies”), while in Victoria, right-wing evangelicals have made much headway in recent years, so there is a ready-made audience in the party for a far-right push.

Could the Liberals tilt in the other direction to win teal-held seats? It’s difficult to see who could lead the party in that direction. Dutton is the last man standing, at least unless the party shoves an incumbent aside to create a spot for Frydenberg at a by-election in coming months. And nor is the right, which has spent decades squeezing out the moderates, likely to want to give them a lifeline by putting up moderate candidates in teal seats.

It’s possible the teals will destroy themselves by identifying too closely with what could become an unpopular Labor government, creating the space for the Liberals to take them on at the next election. But given that the teals are for the most part for market “solutions” and “tax reform” and are no friends of the trade unions, this seems unlikely.

Finally, if the Liberal Party has historically been the mouthpiece of the ruling class, a crisis in its ranks creates problems for the capitalists.

The Liberal Party is not just a parliamentary party, but also an important organisation for cohering the ruling class. The Liberal and National parties have waged political battles on behalf of capital against the working class for more than a century, allowing the capitalists to get on with the day-to-day tasks of exploiting the working class at the point of production. They have also provided a means for the rival fractions of capital to have debates without engaging in open battle that might provide opportunities for the working class to advance its fortunes.

The ruling class values the Liberal and National parties and supports them through a wide range of means, including the mass media, donations, sponsorship of party think tanks like the Institute of Public Affairs, release of staff to work on campaigns and, as the capitalists demonstrated during the final year of the Whitlam Labor government, financial sabotage of their opponents through investment strikes and capital flight.

This is not to say that the ruling class is at all times opposed to Labor winning a majority. In 1983, the ruling class favoured Bob Hawke’s Labor to win office because the Fraser government had proven so inept and Hawke offered a program to tame the unions and cut wages, something he did very successfully in the 1980s. In this election, such is Albanese’s Liberal-lite agenda, most of the ruling class did not throw its weight behind Morrison, the obvious exception being News Corporation. But Labor is Team B; the Liberal Party is the ruling class’s favoured instrument since it is not influenced by the trade unions, even in the most bastardised and corrupted way that Labor is through its internal structures and political appeal.

The teals are in many cases from the same social milieus as the Liberals they defeated, and their victory represents a split in ruling-class ranks.

Analysis by Ben Raue of the Tally Room blog shows that the electorates in seats won by teals have the highest median incomes and the highest educational qualifications. Even though, as pollster Kos Samaras points out, high median incomes disguise the existence of many students and hospitality workers on low incomes in areas such as Bondi in Sydney’s Wentworth, such seats have been central to the Liberal Party’s functioning and home to many of its leading figures and financial supporters, both corporate and individual. All the top private schools, the mansions, the social networks that bind the ruling class together are based in these areas.

The victory of the teals and the hit taken by the Liberal Party in its traditional heartland indicate fissures in these elites.

Allegra Spender, victor in Wentworth, is a business person who comes from a strong Liberal Party family background—her father was a Liberal MP and grandfather Sir Percy Spender, a Menzies government cabinet minister. Kate Chaney is a former Wesfarmers executive, and is a granddaughter of a Menzies government minister and niece of a former Liberal senator. Others have backgrounds as barrister, paediatric neurologist, public relations specialist and GP.

The teals’ campaign was coordinated by Climate 200, run by Simon Holmes à Court, son of Australia’s first billionaire, Robert Holmes à Court, and who had earlier fundraised for Frydenberg. Climate 200 received support from Mike Cannon-Brookes, the billionaire founder of Atlassian software, and Nancy Milgrom, who owns Sussan and Sportsgirl. And on the board are former Liberal MP Julia Banks and former Liberal leader John Hewson.

The teals attracted support from Liberal bluebloods such as Rob Baillieu, from one of Melbourne’s long-standing establishment families and son of former Victorian Liberal Premier Ted Baillieu.

These are the very stuff of the Liberal Party but have turned on “their” party. And it is not ruled out that the teals could form a party of their own which, if they are able to consolidate it over a couple of federal elections, could become a big obstacle to the Coalition ever winning office in its own right.