Alan Kohler: Why the Liberal Party lost, and could keep losing into oblivion

Matthew Guy steps down as Liberal leader

The Liberal Party is faced with the classic legacy business problem. That is: How do you appeal to new customers without losing the old ones?

Organisations die when they get this transition wrong, businesses like Blockbuster Video, Borders bookstores and Kodak. The Liberal Party could easily go the same way as them.

The classic legacy challenge is newspapers and retail.

Myer has not gone broke, and has actually started to do quite well with online sales, but it was touch and go for a while and it’s not entirely out of the woods yet either. Newspapers still exist, but Fairfax has been absorbed into a TV network and no longer exists.

Curse of legacy

The political challenge of the Liberal Party is similar – they have to find a way to appeal to urban millennials while not losing their existing older conservative voters.

The problem is mainly about two things: Climate change, and deficits and debt, which nobody cares about anymore, so that Liberal scare campaigns about energy prices and government debt simply don’t work now. That point has been especially driven home by the Victorian election result.

And to a large extent the Liberals have been led up a garden path on both of those issues by the foghorn of Rupert and Lachlan Murdoch, through their newspapers and Fox News. They are so loud and insistent on right-wing issues that it can seem like they speak for the majority, but if that was ever true, it isn’t any more.

Matthew Guy

A lot of Liberal challenges in the Victorian election involved the same old refusal to face reality.

Despite Matthew Guy’s attempt to jump on the decarbonisation bandwagon, and some half-hearted efforts by the federal Liberal Party to do the same, their brand is still firmly associated with climate denial thanks to years of frenzied opposition to any action at all on global warming and their failure to denounce and abandon Rupert and Lachlan Murdoch as James Murdoch did.

More than Morrison

After the federal election, and as recently as last week in conversations with senior Liberals, they have been persuading themselves that the loss was all about “toxic” Scott Morrison, especially after the secret ministries.

They say it was Morrison’s arrogant manner, his dreadful record with women, refusal to consider a federal integrity commission as well as his crazy stunt in 2017 of bringing coal into Parliament that did for them in May.

That was given a kick along last week with Virginia Bell’s report on Morrison secret ministries, which helped to refocus attention on Morrison.

But after the Victorian election on the weekend, Australia’s urban conservative party has to face the uncomfortable fact that there is something much more fundamental going on.

There will be plenty of theories about what went wrong, and even more abundant solutions, but a lot of them will involve the same old refusal to face reality.

As RedBridge political pollster and former Liberal strategist Tony Barry remarked during the ABC’s election coverage on Saturday night: “As usual, we’ll protect the guilty and punish the innocent. I suspect we’ll keep on drinking the Kool-Aid next term as well.”

“The Liberal party room is beginning to look a little bit like Jonestown,” he said.

Branding issues

For at least the past 10 years, the Liberal Party based its whole branding on economic management with debt and deficit scares about Labor, and energy price scares based built on their own policies opposing action on climate change.

The first of those was the basis of Victorian Liberal leader Matthew Guy’s campaign: Victoria’s debt is larger than NSW, Queensland and Tasmania combined, he said repeatedly. For that reason, he opposed Labor’s big infrastructure plans, including the suburban rail loop.

It didn’t work. The pandemic has fundamentally changed public perception of government debt and ironically it was the Liberal Party that made that happen.

Ironically, Scott Morrison and Josh Frydenberg paved the way on debt acceptance. Photo: AAP

Former treasurer Josh Frydenberg’s spending during the pandemic, supported by Scott Morrison, was a clear statement that sometimes, fiscal discipline simply doesn’t matter, and in the right circumstances the deficit and government debt can be anything at all, with no negative consequences.

You’re then arguing about the circumstances rather than the fact; it’s no longer an absolute that “deficit bad, surplus good”.

It’s very difficult to recover from that and regain the ability to accuse the other side of fiscal indiscipline, so that’s one of the Liberal Party’s brand pillars gone, at least for a while.

The other key brand pillar of resisting action on climate change was removed first by the 2019-20 bushfires in eastern Australia and then by this year’s floods.

There is no longer any doubt that climate change is real, and failing to do something about it is a road to political oblivion, if not human oblivion.

Victorian Premier Dan Andrews’ revival of the government-owned State Electricity Commission as an investor in renewable energy was a masterstroke, reviving discomfort with privatisation at the same time as displaying his support for decarbonisation.

Matthew Guy’s promise to legislate a 50 per cent emissions reduction target by 2030 was neither credible, nor enough, and his scare campaign about government debt wasn’t scary enough.

Can the Australian Liberal Party actually pull itself out of this dive while remaining a centre-right party that is relevant to urban conservatives, in coalition with the rural National Party?

Maybe not.

Alan Kohler writes twice a week for The New Daily. He is also founder of Eureka Report and finance presenter on ABC news.

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