This has exposed the true depth of the Liberals’ crisis – and all but exiled them from the cities

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Anthony Albanese has cemented Labor in the commanding centre of Australian politics, with the Liberal Party reduced to a right-wing populist party that is all but exiled from the biggest cities.

The election exposed the depth of the Liberals’ crisis. No longer liberal, the party abandoned its traditional strongholds and threw itself into the arms of Pauline Hanson in a desperate effort to save itself.

Opposition Leader Peter Dutton arrives to concede defeat to Prime Minister Anthony Albanese.Credit: James Brickwood

Peter Dutton gave an exceptionally gracious and humane concession speech. But his Coalition did not suffer an honourable failure.

John Howard set the principle of putting Hanson’s racist One Nation party at the bottom of its preference list. Today’s Coalition gave One Nation its preferences in 57 electorates.

Its reward? The lowest share of the primary vote in its history. The loss of its leader’s seat. The loss of seats to Labor and to independents. The loss of metropolitan seats in Sydney, Melbourne, Brisbane and Adelaide.

None of the teal seats returned to the Liberal fold. It appeared on Saturday night to be on track to lose another seat to a teal in Sydney’s Bradfield.

We can now see that the teal breakaway of traditional blue-ribbon Liberal seats was not an episodic reaction to Scott Morrison; it is a structural fragmentation of the Liberal Party that threatens its viability.

It’s rare and difficult for an incumbent government to increase its margin at an election. But to do so in the face of an inflation shock and falling living standards is a striking political achievement.

Albanese’s campaign was masterful. But he was greatly aided by a Liberal Party in the midst of an identity crisis. And the sinister shadow of an unsettling US president.

Prime Minister Anthony Albanese walks through the crowd after his speech at the election night function.Credit: Alex Ellinghausen

To win at this moment in history, a political leader needed to assure Australians that he’d protect their living standards from the dual dangers of inflation and Donald Trump. Albanese succeeded; Dutton failed.

Albanese was Mr Medicare: concerned, caring, sensible, optimistic. Dutton was Mr Nuclear: seething, unpredictable, intimidating, pessimistic.

Dutton’s political persona was well suited for channelling discontent. It worked well for two years. Albanese’s emanated an upbeat reassurance. It shone forth in the last two months. When Dutton called him weak, Albanese responded: “Kindness isn’t a weakness.”

But Labor didn’t win only by offering broader social benefits and wage rises for ordinary people. It met the two preconditions for winning a federal election – it was seen to be a grown-up government in dealing with the economy and foreign policy.

The Liberals helped. They abandoned these equities, allowing Labor to claim them. How? The Liberals have long enjoyed the brand reputation of being responsible economic managers and strong on national security. But in its identity crisis, it has given up trying.

Labor offered two more tax cuts; the Liberals opposed them. Yet for the next couple of years, the Liberals promise to deliver bigger budget deficits than Labor. So the Coalition managed to present itself as the party of higher taxes plus bigger deficits. A crafty cocktail of incompetence. And it offered a nationalised nuclear energy system.

This is not the party of Menzies and Howard, of private sector initiative, lower taxes, smaller government and the market. And while it promised more defence spending than Labor, the Liberals were trumped by the Albanese government’s steady hand in foreign policy and its calm resistance to the US president.

So Albanese was able to gather under Labor’s brand its own traditional perceived strengths in health and education and social trust, plus the Liberals’ titles of better economic manager and national security provider.

If Labor can keep its cool and its newfound unity, it can capitalise on this command of the great equities of national government. But its real difficulties start now. It carefully sidestepped the big crises advancing on Australia.

It has no program for economic revitalisation in the face of a slowing global economy and a fragmenting trade system. It has a thoroughly inadequate capability for protecting Australia from the predations of China and Russia.

It was able to avoid these in the artificial construct of a campaign. The real world will not be so accommodating.

Peter Hartcher is political editor.

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