Howard, Costello, Abbott tell Libs to stand up now or risk losing more ground
The 2025 election defeat was a paralysing blow. But unless the Liberals start to enunciate core values and fighting principles, their decline will accentuate.
The Liberal Party needs to stand up – along with the Coalition in opposition. The 2025 election defeat was a paralysing blow. Policy reviews are essential to regaining relevance. But unless the Liberals start to enunciate core values and fighting principles their decline will accentuate.
Sussan Ley, the new Liberal leader for less than three months, heads a badly beaten and divided party facing an ascendant Anthony Albanese. Ley must establish her authority, promote a more appealing Liberal image and begin taking the fight to Labor. No Liberal leader has faced so many challenges.
As the Albanese government confronts economic, tax and energy conundrums, strong opportunities will open for Ley. But she faces a more urgent task – the Liberals lost in 2025 because the public was confused about their purpose and values. The longer this vacuum continues, the more the Liberals will sink in the polls. Here’s the point: the Liberal Party doesn’t have the luxury of time.
There is a big lesson for the Liberals from the election – immediately champion your core values and run a sustained campaign on these principles (not the details) for the entire three years. Don’t drop surprises three weeks before an election.
Asked about the immediate task facing the Liberals, Peter Costello told Inquirer: “The Liberal Party has to stand for higher productivity and small government – and small government means lower expenditure and lower taxation. These are the non-negotiable values of the Liberal Party. This is the place the Liberals occupy in Australia’s political culture – smaller government and greater personal liberty.
“If Liberals don’t stand for these values then nobody will. The Liberal Party went through a bad period in recent years where it lost sight of those values. There was huge spending during the pandemic and last election, a shocking tactical mistake was made to reverse income tax cuts. The party was confused about its values and it needs to acknowledge these failures. That means returning to its values of smaller government, lower taxation and greater personal liberty.”
Asked the same question, John Howard told Inquirer: “I say to people: ‘Give Sussan Ley support and give her a fair go.’ ” But Howard dismissed policy reviews supposed to cover everything: “We must start campaigning for the next election now by enunciating what we believe in. We don’t have a lot of time.
“The idea you review everything is ridiculous. We’re not going to review our commitment to the American alliance or to individual liberty or the role of family life. But we need to get serious on policy and do it early. It is still possible you can fall further (in the polls); just look at the mess the British Conservative Party is in. I mean, when it comes to net zero you can’t take a year on that, we should have a position in the next month. The Liberal Party brand is still good. I see the fundamental contest being: individual liberty versus collectivism.” Howard warned against gimmicks to reinvent the party or dressing things up like a “new Liberalism”, saying the public was distrustful of such techniques.
Tony Abbott told Inquirer the Liberals must realise that standing on their principles guaranteed a political fight. If their principles are sound, they should welcome the fight.
Abbott said: “The best way to unite the Liberal Party is to attack the Labor Party” – a reminder of Abbott’s opposition leadership over 2009-13.
“Whether it’s immigration, energy, tax or education, any sensible Liberal position will face strong opposition from interest groups,” Abbott said.
“That’s why the Liberals need to come early to their broad positions and argue them consistently for three years. To succeed on policy and principle these days you must argue for a long period of time with great conviction. There is no other way.”
Abbott saw huge opportunity for the Coalition on energy policy. He said Labor’s doubling down on its renewables strategy guaranteed higher prices and system unreliability, with the public sure to become angrier during a second term: “The Liberal Party must start by demanding credible costings for Labor’s existing emissions reduction and energy transition policies. These details have been withheld from the public.”
As a hardliner but a pragmatist, Abbott said: “I don’t think we need to get into the theological question of net zero. That’s not going to help us. We don’t want to get stuck on the question: do we or don’t we support net zero. The test for the Coalition is having a clear, sensible and credible energy policy.
“In my view that policy should be: no coal-fired power stations to close without a reliable alternative; the development of new gas fields at speed; ending subsidies for new renewables given their claim to be the cheapest energy; and ending the bans on nuclear. We should oppose the desecration of our rural environment inherent in the renewables rollout. What’s happening in rural Australia is an outrage and it’s urgent we take a strong stand against this.”
Liberals, advisers and independent analysts have offered Inquirer a range of different, random and speculative views about the early principles the Coalition could adopt in projecting its values; some arise from the past election, others correct for mistakes at that election. This is not meant to be a hard and fast or a prescriptive list.
1. Tax credentials
Liberals need to restore their tax credentials. Pledging tax cuts at the next election won’t do that job. An immediate pledge would be the phase-in of indexation of the personal income tax rate scale, a Peter Dutton “aspiration” from the last election. Labor won’t match this. It becomes a foundation stone for Liberal tax policy standing for the entire term – and a step to tax and spending budget discipline. It would be buttressed by the reintroduction of fiscal rules to guide every budget deliberation.
2. NDIS model
The Liberals should promise to return the National Disability Insurance Scheme to its originating mission: proper care and support for the disabled and disabled children. This is a noble idea undermined by poor policy leading to a financially unsustainable model. Labor’s pledge to reduce annual spending from 14 per cent to 8 per cent, even if achieved, leaves an untenable model, overweight on autism with one in eight boys aged five to seven years now on the NDIS. The Liberals should be able to take a position on broad principle – in the interest of the disabled and the entire public via the budget.
3. Childcare
With Labor planning a defining institution-based universal model of childcare the Liberals should offer an alternative for all Australians designed to correct the huge flaws in this model of high cost – the Productivity Commission estimates in the $17bn to $18bn range – for minimal economic gain. That means enshrining choice. Without disadvantaging people who opt for centre-based care, the principle should be allowing benefits to flow to families adopting institutional or home-based care, backing the values of competition and family choice.
4. Back to school
The Liberals should resurrect the education policy devised by former opposition spokeswoman Sarah Henderson for the last election but inexplicably kept under wraps. This would mean a three-year campaign based on revised classroom and teaching method to address one of the nation’s greatest and longest failures – declining school outcomes with consequences for students and most families. Politicians and economists have long been in ignorance of the science of learning and the need to inject the technique of explicit instruction across all school systems, with Henderson’s policy targeting reading, writing, maths and science.
This is about the future of the country. The Liberals need to call out the systematic blunder of pouring billions into defective classroom practice – with school education being a culture war where the tide is turning; witness Education Minister Jason Clare’s new approach.
5. Competition policy
The Liberals should focus on competition policy and reducing red and green tape as critical steps in the productivity revival.
The primer on competition is the submission to Labor’s roundtable from Policy Institute Australia, headed by Amy Auster, with its analysis also drawing on former Productivity Commission chairman Peter Harris.
The game plan is a bolder competition agenda based on substantial financial incentives, limiting the role of “gatekeepers” that throttle competitive behaviour and pushing greater competition into healthcare, financial services and infrastructure.
6. Climate change
The Liberals need to revise their core stance on climate change given the rapid shifts in the energy area and their conclusions from the last election. This demands both clarity and compromise given internal divisions and the need to appeal to a voting constituency that believes in climate action but is sure to become more sceptical of Labor policies.
The starting point should be a focus on independent costing of Labor’s energy transition and the full economic impact of the Labor agenda with its damage to household budgets, industry competitiveness, fiscal policy via subsidies and reliability of the system.
Presumably, the Liberals will avoid the folly of fighting against net-zero symbolism. That means realising they don’t need to attack a 25-year distant target to effectively attack Labor’s energy policy, now and out to 2030 and 2035.
This should be tied to a technological-neutral stance in relation to emissions reduction and, presumably, limiting the nuclear policy to abolition of the existing, irrational nuclear bans.
7. Defence spending/US clash
Given the certainty of a clash between the Trump administration and the Albanese government over defence spending, the Coalition policy at the election – with its defence pledge of 3 per cent of GDP – becomes only more pertinent and potent. Every signal from the Trump administration points to a coming collision. The US believes Australia’s defence spending is inadequate as an alliance partner, out of step with pledges by other allies and, critically, that it cannot properly sustain the AUKUS submarine commitments. Basic to the Liberal position is that most Australian analysts back the 3 per cent target as being in the national interest.
8. Immigration
Eighth, the Coalition needs to identify its core principles on immigration and maintain them – presumably a more restrained immigration intake, with a much stronger and more explicit entry requirement relating to capacity to integrate into Australian society in the cause of social cohesion.
9. Identity politics
Ninth, the Coalition should stand against the normalisation of identity politics in the federal bureaucracy, corporate Australia and in parts of the judiciary. Argued with skill and persuasion this will win majority support from the public. The policy edicts from the Australian Human Rights Commission reveal the extent to which identity politics is corrupting the goals of non-discrimination.
Opposition legal affairs spokesman Julian Leeser, in his previous capacity, warned that AHRC’s “existence” needed to be called into question given its failures and distortions on the issue of racism and its refusal to confront anti-Semitism in Australia. There is no sign of any genuine rethink by the AHRC. In this context the Coalition should consider radical surgery, even abolition and re-creation of the AHRC, to remove its operational commitment to identity politics and to re-establish human rights policy in this country on universal principles of equality, liberalism and non-discrimination.
10. Medicare
Finally, John Howard issued a warning about the Coalition’s political vulnerability on Medicare. Pointing out that it is now 30 years since, as opposition leader, he completely endorsed Medicare, Howard said it was extraordinary that Labor was still recruiting Medicare as an electoral weapon against the Coalition on a permanent basis. In terms of political and policy priorities, eliminating the grounds for Labor’s attack on Medicare must be an urgent and sustained Liberal priority.
A number of experts suggested to Inquirer the Liberals frame their policies under two broad themes overall – the need for enterprise freedom and construction of new social contract for the country.
Interviewed by Inquirer, Michael Kroger addressed the Medicare issue: “Political parties win elections by prosecuting their own brand equities. The best examples are the Labor Party at the 2016 and 2025 elections when it was highly successful in prosecuting its number one brand equity – Medicare.
“By contrast, Labor failed at the 2019 election on tax when it prosecuted an argument on the Liberal Party’s No.1 brand equity – taxation.” The political logic is for the Liberals to restore and revive their once unrivalled brand equity – the economy, tax and productivity.
Former chief executive and now senior fellow at the Institute of Public Affairs John Roskam, told Inquirer: “The Coalition has to pick some issues and stand up now, not later. It can’t wait for endless reviews. If it doesn’t the public will come to believe the Coalition is without purpose. It’s one thing for a political party not to have policies but it’s fatal for parties not to have a purpose.
“At present, there is nothing for the Liberal Party to unite around – nothing to unite the parliamentary party around or party members or potential voters. Albanese has a point: people know what the Coalition opposes but are not sure what it supports.
“I don’t think the political class, Labor or Coalition, grasps the extent of concern in the community about the future.
“People feel the country is changing before their eyes, they see a culture they don’t recognise and they fear their children and grandchildren will have a lower standard of living. The housing debate is a proxy for the issue: do we confront a decline in our standing of living?
“Yet the Liberals don’t have the language to deal with the gravity of these sentiments, about living standards, social cohesion, national security and educational decline. And they don’t have 12 months. It is absolutely essential that the party stands up. Too many people feel the Liberals stand for nothing or, if they stand for anything, it is to oppose. If the Liberals don’t stand up now their authority will decline further, that just means more drift, perhaps years of drift.
“What’s at stake is not just the future of the Coalition but the direction of the country.
“I fear that too many MPs now don’t really know what their purpose is, and if the Liberal Party doesn’t have a sense of purpose, then it faces a crisis.”
Roskam raised an alarming point. He was told by an insider that the Trump factor had been important in the 2025 election, but in a different way to the common assumption. Roskam said: “The feeling, apparently based on the research, was that Peter Dutton couldn’t talk about any cultural issue at all, education being an example, because it was seen as too Trumpian.”
The Liberals need to speak to their values – and that means finding ways to counter the line that they are repeating Donald Trump, the kiss of electoral death in Australia.
Paul Kelly is a director of Policy Institute Australia.
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