COALITION TURMOIL, THE LIBERAL PARTY – AFTER THE MAY ELECTION PARNELL McGUINNESS

The results of the May 2025 federal election have opened up serious challenges for the Liberal Party opposition – not least of all the end of the coalition arrangements with the National Party. The full impact of what has happened has not yet been fully realised and the way ahead will be full of rebuilding and the need for compromise in an historic shift in political certainties. Both John Howard and Tony Abbott – former Liberal Party prime ministers – have criticised the move to end, even temporarily, the Coalition agreement. On Wednesday 28 May 2025, John Roskam, former executive director and now senior fellow of the Institute of Public Affairs and Parnell McGuinness, policy strategist and commentator addressed The Sydney Institute to discuss what happened and what can be done.

COALITION TURMOIL, THE LIBERAL PARTY – AFTER THE MAY ELECTION

PARNELL McGUINNESS

I know we’re here to talk about the Liberal Party and its future, but I’m bored with all that. I’d rather talk about ice cream. Ice cream is delicious. Just about everyone likes it. And maybe ice cream is the key to saving the Liberal Party.

But first, since Gerard and Anne have so kindly invited me here to talk to you about politics, I’ll talk about the Liberal Party.

I could go on for ages diagnosing how the Liberal Party got itself into the predicament it’s currently in, and which Liberal Party faction was to blame. In fact, I did in the original version of this speech, but I’d have you here for half the night. So, if you’re interested in my equal opportunity roasting of the Liberal Party’s factions, I’ll put the unabridged speech up on my Substack – @parnellpalme.

In short for now, though, I’ll just say that it’s the economy, stupid. Politics may be downstream from culture, but culture is downstream from economics.

The Liberals are losing everyone

Because it didn’t realise this, the Liberal Party has lost just about every demographic.

Let’s start with young people. The Liberal Party probably hasn’t felt the loss of young people as much as it should, because they never really had them in large numbers. Since the middle of the last century, young people have usually started off leaning left. But the problem for the Liberals is that, as the Centre for Independent Studies has found, the traditional trajectory to the right is no longer taking place.

Worse, people are now moving left. Research conducted by Spectre Strategy just before the 2025 election found that people who had voted Coalition in 2022 switched their vote to Labor. The Liberal Party “defectors”, as the research referred to them, weren’t just in the 18-34 year old age bracket. More voters switched their vote away from the Liberal Party than stayed with it in every age group under 55.

Why are people leaving the Coalition

But all is not lost. Half of those Coalition defectors were soft in their voting intention right up to the election. That means there’s still a chance of winning them back. The bad news for conservatives is, that the “defectors” overwhelmingly considered themselves to be in the political centre. They’re not looking for more conservative policies. They want a party that speaks to their material challenges. That’s classical Liberal territory.

Ice cream

This is where I might start to talk about ice cream. Ice cream solves all your problems. And ice cream can help us think about the policy challenge ahead for the Liberal Party.

Let’s say Labor is selling ice cream – vanilla. It’s the only flavour people know. So, when you ask voters what they want, they say “vanilla.” Then the Liberals come along offering… vanilla. Just a slightly different brand. That was the strategy in 2025 – and it didn’t work.

But imagine what a hero the first vendor to offer chocolate ice cream must’ve been. The Liberal Party wants to be that hero, so it needs to stop copying flavours and start inventing them. That will mean understanding modern society. The world has changed but the Liberal Party has not kept up. Instead, it’s left grasping for its opponents’ policies or the nostalgic policies of a world that is no longer.

I believe it needs to start by thinking more about the problems facing Australians in the modern age.

Women

Consider women. Women’s lives have changed. But the Liberal Party (and in fact right-leaning parties around the world) are missing the memo. The slogan goes “a man is not a plan” and it’s not just some feminist nonsense. In an age where families can and do break down all the time, it’s simply reality.

So, clever women rationally invest in their education and in establishing themselves in the workforce before they even consider acquiring a dependent. For some the biological clock ticks out before a baby can get a look-in. Others are faced with the fact that having a baby doesn’t guarantee the father will stick around, so it’s wise to keep working.

So yes, more women are working. But for many, the amount they work and how they juggle work and family isn’t empowering. Most women have the same number of choices they had in the bad old days: one. Instead of having to stay home with the children, now they have to go to work and find someone to look after the kids.

Successive Labor and Liberal governments have offered only one way for women to do that: centre-based childcare. It’s not ideal or flexible and, as we’ve learned recently, it may not always be safe. More and cheaper centre-based care is vanilla. The Liberal Party’s mission should be to offer women chocolate.

To do that, it has to acknowledge that the 1950s family is not coming back and consider how it can support families and women in the here and now. One classical liberal option I’ve advocated for in the past is tax-deductible childcare, but the point is, we need to start asking different questions.

“New Australians”

A group that the Liberal Party has slowly and then completely lost over the last decade is migrant communities. As demographer John Black has pointed out, they will be the fastest-growing demographic chunk of suburban Australia for at least the next two decades. As he puts it, they tend to “consume right and vote left”. That is, they prefer private schools and health insurance, but “are highly transactional when it comes to basic family needs, like access to health and education”.

These “new Australians” are highly entrepreneurial. According to one report, about a third of Australian small businesses are owned by migrants. Black quips that he “wouldn’t want to be a Labor prime minister standing between them and a tax cut”.

So, how the hell has a party which purports to favour low taxes, entrepreneurialism and the choice offered by the private sector lost the vote of this growing group? Wilfully and stupidly, is how.

For many on the right, the legitimate debate over the rate of immigration intake and the skills and attributes we should select for has morphed into a general distaste for migrants who have come legally and gone through the lengthy process of obtaining citizenship. This is a huge missed opportunity and counter-productive to boot.

Where Prime Minister John Howard focused on how immigrants could be integrated into the community, the Liberal Party today is just pushing them into the arms of Labor. It will, of course, be harder to win new Australians back than it was to lose them. But I guarantee they can think of better and more wealth-creating ways to use their money than the government can. They might even help develop chocolate ice cream. They are a natural fit for an aspirational philosophy which values choice and would be worth the effort.

Housing

And then there’s the issue that affects everyone: housing. Develop and advocate for better solutions to housing and the Liberal Party could reverse its decline among all demographic groups. As Spectre Strategy founder Morgan James notes, “home ownership is a powerful indicator of voting preferences, with non-homeowners largely eschewing the Coalition”.

Spectre found that people who voted for the Coalition in 2022 but not in 2025 “are almost twice as likely not to own a home”. This once again underscores the importance of increasing housing supply. And there’s a cherry on top for whoever gets it right. the Spectre research found that young people who are homeowners tend to vote for the Coalition. So, there is a simple and clear way to win over young voters: make home ownership an attainable goal.

But to do that, the Liberal Party will need to have a serious chat with its own base. It’s these older voters who oppose increasing density in their areas. Often, according to a 2013 study by the Australian Housing and Urban Research Institute, that’s due to the “imagined characteristics of future residents” who would live in these so-called “affordable housing” developments.

Which points to another opportunity. Liberals should challenge the ideological notion that all housing development must be or include “affordable housing”. At this point even building more high-end housing would be helpful because we so desperately need more supply. And if it were to be high-end housing, would the “imagined characteristics of future residents” still be a problem? I’d suggest likely not.

Classical liberals should be disrupting the stale conversation about “affordable housing” and instead focus on increasing supply – of all kinds.

I could go on forever considering ever more specific groups and policy areas. And I plan to, in a piece I’m working on at the moment. I am trying to ask the right questions, using polling insights to understand the challenges and opportunities better. My hope is that asking the right questions about people’s lives will inspire better solutions.

But for the purposes of tonight’s event, I’ll stop here. With a call for good, new-fashioned, classical liberal entrepreneurialism. The kind that is curious and open to disruption and different answers. The kind that realises our lives have changed irrevocably and there’s no going back to where we were before. The kind that can imagine chocolate ice cream without being funded by cocoa producers or becoming beholden to Deep Freeze.

If the Liberal Party wants to survive, it needs to stop asking people if they like vanilla. It needs to offer them something richer, more surprising – something that tastes like the future. It’s time to start making chocolate.