In the end, there is no sugar-coating it: the Coalition’s defeat on Saturday was a catastrophic one, its scale and depth not predicted by political pundits.
But far from signalling the death-knell of the sensible right in Australia, it represents an opportunity for renewal. A narrow loss would’ve been far worse.
Losing campaigns are always forensically dissected, but in doing so we can lose sight of obvious truths. For me, the lesson of this election is that if your policy cupboard is bare – or little more than an ersatz version of your opponents’ – you will not win; at least not against a first term government in Australia.
This was the major reason for Peter Dutton’s defeat. He did not present a compelling alternative policy platform. Since its election in 2022, the Albanese government has pursued an Australian version of Bidenomics.
It has rejected the traditional notion of balanced budgets, opting for permanent fiscal stimulus even as inflation surged in this country. It has relied on the dishonesty of bracket creep to prop up revenues.
It has sought to entrench welfare dependence across the entire community, in contrast with the traditional Labor belief in means-tested safety nets. And it has embraced net-zero green utopianism, even as the rest of the world is retreating from it.
This policy framework has hobbled our post-Covid recovery, seeing living standards fall more in this country than any other OECD economy since 2022. To deal with its self-inflicted cost-of-living crisis, Labor has committed billions of dollars on energy and other subsidies, adding fuel to the inflationary fire.
Dutton had a clear choice early in the campaign. He could have called – echoing Kevin Rudd in 2007 – for this reckless spending to stop. But instead, he endorsed Labor’s idea that this was in fact the solution to the problem.
Once he announced his temporary fuel excise cut, it was impossible for him to later pin the blame for our inflation on Labor’s poor economic management. Dutton cut himself off at the knees.
With the exception of his nuclear policy, Dutton’s broader policy platform was difficult to distinguish from Labor’s. At best, it was a Morrison-lite agenda.
He remained committed to net-zero emissions and therefore higher power prices. He rejected Labor’s derisory income tax cut and refused to commit to eliminating bracket creep. He offered no alternative vision to Labor’s cradle-to-grave, high-tax and welfare-dependent vision for the country. This policy me-tooism irreparably damaged Dutton’s economic credentials.
In 2024, he was viewed by the public as a superior economic manager to Albanese, better equipped to deal with the cost-of-living issue. By polling day, this advantage had evaporated.
But Dutton should not be the only one to wear the blame. He was following in the policy footsteps of Malcolm Turnbull, Scott Morrison and Josh Frydenberg, Liberal leaders who capitulated to the progressive left on contested policy questions, refusing to offer principled objections to its pet solutions – whether classical liberal in nature or conservative.
Climate policy is the most egregious case in point, but our lockdown-heavy response to Covid is another. (To be fair, Morrison committed to meaningful reform of our personal income tax system – the stage three tax cuts – but by back-ending them, allowed the Albanese government to tear them up.)
What next for the sensible right in Australia? The next Liberal leader should resist the temptation to move even further left on policy.
If you present yourself to the electorate as Labor-lite, voters cannot be blamed for opting for the real thing. But nor should he or she unthinkingly embrace the policies of Donald Trump or “new conservatives” such as JD Vance.
Trump’s policy philosophy is hopelessly conflicted; an unviable combination of Reaganite tax cutting and deregulation, which will boost supply and growth, and protectionism, which if persisted in will result in stagflation.
Nor should Vance’s instinctive anti-corporate populism be adopted, as Dutton seemed to do with his threat to break up the major supermarkets. The right should look closer to home for the way forward, to the policy and political legacy of our reformist leaders of the 1980s and 1990s – both Coalition and Labor.
They embraced economic rationalism – open trade, competitive internal markets, lower income taxes and budget prudence – but with Australian characteristics; most obviously the desire to provide targeted safety nets for the less well off.
This was Milton Friedman with a social conscience, lacking the hard edges of Thatcherism. It served as a policy template for Bill Clinton and Tony Blair, and made the Australian economy the envy of the world.
It rewarded aspiration and ambition, it privileged meritocracy over entitlement, and it scaled back the Leviathan state – focusing it on practical improvements within strict fiscal constraints.
The federal Labor Party’s rejection of this policy philosophy is complete – and possibly irreversible. Right faction figures, such as Jim Chalmers, now demonise and caricature it, having been successfully colonised – intellectually – by the party’s hard left. Following this famous victory, Labor will likely fall victim to hubris.
It will double down on its first-term agenda, committing to further entitlement spending, much higher taxes and full steam ahead for its renewables-only dystopia.
It will overreach politically and economically, weakening our economy and society further and exposing us to an increasingly dangerous world. This will sooner or later provide an opening for a competent, disciplined opposition. To take advantage of it, it must be prepared to be bold on policy – and true to the best of its philosophical traditions.
David Pearl is a former Treasury assistant secretary.
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