THE LIBERAL PARTY AFTER THE 2026 BUDGET – PRU GOWARD

The rise of the Australian Right’s One Nation party and its leader Pauline Hanson in 2026 reshaped political thinking and reduced the Liberal/National Coalition to a third place in polls, behind Labor and One Nation. On Wednesday 3 June 2026, Tom Switzer, columnist with The Australian and presenter of Switzerland podcast, and the Hon Pru Goward AO, former journalist and NSW Liberal Party minister, addressed The Sydney Institute to offer a number of explanations as to what pressures had changed the political landscape and threatened the Liberal Party as an opposition and party of government.

THE LIBERAL PARTY AFTER THE 2026 BUDGET

PRU GOWARD

I guess you could say this is a discussion about whether we’re talking about the first swallow or a dying swan. Is this about the early signs of a Coalition comeback, the post-budget debate, or the last rites?

It’s too early to write off a party that’s been such a successful party of government for such a long time. It’s worth remembering why Menzies formed the Liberal Party, and the reasons are not dissimilar to those of today. You had a crisis, a world war followed by a resurgent Labor Party with a very strong socialist agenda. The Liberal Party had been smashed in 1939 with the death of Joe Lyons and Menzies, as the new leader, came close to losing the federal election of 1941 and was soon driven from office.

Over the next few years, Menzies realised he had to get a broader coalition of people together. And change the language and talk differently to people who had been forgotten, overlooked. We’re seeing some of that today. But this isn’t the first time there’s been a cost-of-living crisis since 1944, nor is it the first time there’s been inflation since 1944, or high interest rates since 1944. So why is it that the electorate seems so much more unhappy and prepared to turf out a party that has, as I said, delivered very sound government for much of the last 70 years?

You could say that the Liberals had their run. That they did deliver. But voters ask, what are you going to do for me now? We’ve had all that, we’ve banked that, and now we need a government that can resolve our difficulties today.

Let’s just take a step to the side and look at One Nation. One Nation has been a very successful protest party. It doesn’t have the intellectual depth of Farage and Reform in the UK which, in a sense, has even more existentialist challenges than we do. But it’s certainly true that One Nation has been the beneficiary of disillusionment with immigration.

Australians have never liked immigration. In my view, multiculturalism has never been popular. It’s been a pact between the major parties for 70 years, since the war, to encourage and enable immigration, irrespective of the objections of Australians. And people object to that, particularly when state governments have been unable to keep up with the infrastructure demands and the pressures that puts on social homogeneity.

The question is, why is this an issue now? Well, I don’t think we really need to go further than looking at social media and the consequences that has for public debate. A public belief that your views are shared by everybody you know, because everybody you know is on the same websites or watching Sky News or the ABC. And we have a much more diverse range of information than we’ve ever had, and a tendency for people to stick with what they like hearing, rather than in the good old days when you got the newspaper, everybody read the same newspaper, everybody watched the same four news services, and you made your mind up. But you all got more or less the same information. You could not say that is true today. Everybody’s truth is different. There is no such thing as objective truth, is probably fair enough.

Ours is a fractured world but also one in which people believe everybody around them shares their views; that is the role social media plays in feeding people what they want to hear. We all live in our own information and opinion bubbles.  Not so much in older age groups. Older age groups are much more dependent on traditional forms of media. But more likely to be the case for young people who never watch a television news service, never read a newspaper and get their feeds from social media sites that confirm their beliefs. Surely, that is a large part of why there is a greater sense of resentment and dissociation today than there has ever been. Traditional media control, often to the despair of political parties, in a sense, united people in a way that I don’t think we see today.

One Nation has always been consistent about immigration and always been that cut through voice of objection. I live in a country town. I would say three quarters of the Liberals I know in Goulburn are voting One Nation or talking about voting One Nation. They talk about her directness, that we know what she stands for, what she’s always stood for, that she’s consistent. There is obviously a belief that this is a good thing.

Yet, we are at an early stage in an electoral cycle following Labor’s fantastic victory at the last election. This time a year ago Labor was riding high. Nobody would have believed that within 12 months Labor’s standing would have fallen so much, and the debate should be so very disapproving. Partly, that is a reflection of a very poorly thought through budget. And overreach, of course, is the beginning of the end of a government. Governments can get too comfortable and start to think they really do understand the electorate, have a mystical connection with them and the electorate trusts them. They think they don’t have to work for it anymore. That’s when governments start to die.

We saw that in the May budget. Since then, they’ve tried their best to spin the message differently. But that overreach is a bad sign for the Albanese Government, and the beneficiary is not the Liberal Party, but One Nation. The community has now perceived that the Liberal Party, in its past manifestations and its past episodes of government, has not done much differently from Labor.

I do think the management speak that has become so prevalent in political circles in Parliament House, all driven by talking points that are issued to members before they walk through the doors, is partly to blame.  That managerial tone is very unsatisfying for people desperately trying to get on with their lives. For people who don’t have a lot of time, the formulaic word-speak doesn’t mean much anymore.

This is what happens when you work as hard as small businesspeople work, as tradies work, as shop assistants do, and you see your taxes being spent on Snowy Hydros where costs have blown out of control, face increasing electricity bills you have to mortgage your home to pay for, all because of mismanagement by the public sector. You cannot blame them for turning their backs on both political parties. Neither party has talked sufficiently about their problems.

President Trump, whether you love him or hate him, was a very decisive factor for the last federal election campaign. After the US midterms, we shall see a declining impact of that persona on how Australians view their own political parties. It was certainly a huge price that Liberal Party leader Peter Dutton paid at the last election.

It is too early to tell whether or not this is the terminal decline of the Liberal Party. I understand that there are similar movements around the world, but nobody can ever say that democracies are not best served by centre right governments. The impact that One Nation is having on the Liberal Party is also going to be reflected in working class Labor seats for exactly the same reason. Hard working Labor people don’t like the waste either and they don’t like governments that aren’t interested in their issues.

We are a wealthy, happy country. Not much goes wrong here. I doubt that those culture wars that consume so many of us actually do matter very much out there. They matter when there is a point of ridiculousness, like some of the transgender debate, particularly the more recent comments. But, by and large, my sense of Australians is that they’re not particularly concerned about that. In fact, they are deeply irritated when they see their political leaders distracted from what they think is the only thing you should care about, which is the cost of living and their sense of comfort and security, and talk about this other stuff.

If we are looking at a way back for the Liberal Party, it will have to be about paying attention to what the mainstream thinks is important. Culture wars discussion should not take precedence over discussions about tax, wasted money, what governments are here for, and making sure my kids have a house. Menzies’ big ambition was to move home ownership from the low 60s to the high 70s, which is what he achieved. There wasn’t a culture war in that, that was just a very practical goal with huge cultural ramifications. Societies are much happier and much more comfortable when they own their own houses, or when they think they can.

Angus Taylor, in his first press conference, focused on housing affordability. If you’re going to get the young vote back, that’s what it’s got to be about, because that’s where their sense of loss is, that they can’t have what they saw their grandparents have, and their parents have – a home of their own, and a bit of dirt in the backyard, or a few pot plants, even on a verandah.

One Nation is riding high at the moment, because One Nation is seen as a great protest voice. It’s direct, no frills, word salads, fantastic, we all get what she’s saying. But as we approach the elections, both parties need to be able to demonstrate that to be fit for government you’ve got to be more than a protest party. I think Australians know that. They understand what housing affordability will be about, they understand interest rates, they understand the impact of planning laws, they understand the impact of regulation and over regulation, they understand the impact of unions on construction costs. That’s what they need to hear from the Liberal Party and what they won’t hear much of from One Nation.

The One Nation rise hasn’t been well scrutinised. It was a shock to discover that the new One Nation member for a seat in South Australia didn’t know she had to come up to Adelaide to sit in the parliament. She was shocked, how can she give up her business? We need to understand that the electorate needs to know a bit more about them, especially if their leader has openly said she’d like to be Prime Minister, and she considers she could be Prime Minister.

There’s a long way to go, but there is no such thing as a democracy without a centre right government. You have to have a government that effectively recognises the role of human ingenuity and imagination and risk. We will never grow without risk. We cannot have a society where risk is punished and not rewarded when it succeeds. We cannot have a society where labour is taxed so heavily with progressive income tax rates that nobody wants to work anymore. A system that doesn’t reward labour for its efforts and for its extra efforts and doesn’t reward investors and business owners for the enormous risks that they take, is doomed.

For that reason, it is fanciful to suggest that there will ever be anything other than a centre right government anywhere in the world. Who makes them up? That’s going to vary. For the first time in Australia, maybe that will be different here. I doubt it.