Interview: Don't write the Coalition off just yet

Published May 21, 2025, 5:30 PM

This week the federal coalition fell apart in spectacular fashion, with the Liberals and Nationals splitting for only the third time in their 80 year history. But they've had plenty of other scraps in between. 

Tom Switzer, executive director at the Centre for Independent Studies, talks to Michael Thompson about what drove the break-up, and why the situation may not be as dire as many suggest.

Welcome to the Fear and Greed Business Interview. I'm Michael Thompson. This week the Federal Coalition fell apart in what appeared to be fairly spectacular fashion, with the Liberals and Nationals going their separate ways for only the third official time in their eighty year history. So we wanted to take a closer look at what drove Susan Lee and David Little Proud and their respective parties apart, and whether anything can bring them back together, or considering the slightly rocky relationship between the two parties in the past, whether this whole thing could in fact be a storm in a teacup, so to speak. Tom Switzer is executive director at the Center for Independent Studies. Tom, Welcome to Fear and Greed.

Michael. Great to be with you.

What do you reckon? You wrote a piece in the Financial Review which has really asked this question of whether they will be getting back together and whether this is in the context of a fairly rocky history, it might just be just another in the road.

Well, the conventional wisdom, Michael is that this is a debarkle for center right parties, and you mentioned it's very rare for the coalition agreement to be ripped up by one of the parties, and in this case it was the National Party. But anyone who's studied the history of the coalition going back a century would recognize that many times throughout that period the center right Liberals or the center right United Australia Party before that, and the center right Country Party and then it became the National Party, they've also often had serious clashes, both personal and ideological, and I think we should bear all that in mind before getting too worked up about the significance of this week's news. It's terrible news. I don't want to sugarcoat it. There are real policy differences which we can talk about, but anyone who has a sense of history should put this week's events in a broad historical context and recognize that both major both of these parties have an amazing availability to apt and bounce back and then form coalition and be serious contenders at future elections.

Before we get to the historical context, let's look at what drove it this week. There were a number of key policies that seem to play a role, net zero nuclear power being probably two of the biggest.

Yeah, well, look, I think what's happened with the Liberal Party this election is quite clear they've really bled support in the metropolitan electrics and I think all the available public polling evidence indicates that younger people and women and a lot of people who do live in what used to be very safe Liberal seats are very enthusiastic about decarbonizing the Australian economy at a rapid rate, very pro renewal. But of course that attitude is at loggerheads with the rural Regional Australias constituency, which is more skeptical of reaching net zero targets and also being more open minded about alternative sources of non carbon energy light nuclear, and that's really the clash on that issue, both net zero and but they also clash on the issue of the extent to which government should break up supermarkets, insurance companies and whatnot. Peter Dutton took to the last election the National Party position on that issue, but that is very much at odds with the free market ethos of the center right Liberal Party and that's where they clashed as well.

Okay, was it a surprise to you then that it would drive a split. I mean, because they are fairly significant ideological differences there. But was it a surprise to you that they did actually split over this and that there wasn't more time perhaps given by the Nationals for the Liberals to get their policy agenda in place.

Well Go went on ABC Regional New South Wales Radio on this very subject late last week and I didn't think that they would break up the coalition agreement. No, I was surprised. But having said that, I don't think it's the end of the coalition as we've known, and I think that both parties probably need a time out anyway, just to get their own policy apparatus into gear and work out what they stand for. But I mean, does anyone really think that when push turns to shove and both of these parties, both the Liberals and the Nationals, if arguments taken, it seems unlikely for the foreseeable future. But if they managed to win enough seats to gain a parliamentary majority, you think they wouldn't form government together. I think they would. I think that's pretty evident and that's why I think ultimately all this is to show now there's a lot of turmoil instability. Both parties will want to take a time out when the moment of truth arrive. My sense is that they will unite and form a coalition in the lead up to the next selection.

I want to get to that in a bit more detail in a moment, but it might be a good time actually to have a look at the fact that they have had these disagreements in the past. And obviously they were mentioned that there were three instances where there's been a major separation, but there's actually been a lot of minor issues, particularly save for the Howard years would be a good example bit of disagreements over a gun policy for instance.

Well, you may re in April nineteen ninety six we had the Port Arthur massacre and that prompted then Howard government, the government prime Minister John Howard, and I think that government, by the way, had such a huge majority, won a huge majority against Paul Keating's Labor government in March of that year that they probably could have governed in their own right, but he still kept the coalition with the Nationals, and of course the Nationals represent regional rural Australia, and so with the gun wars that was popular in the metropolitan areas all across the country, but in many parts of Regional Australia. There was a lot of angst, a lot of National Party voters did not believe that they should be punished having guns that are primarily used to shoot wildlife and to their relevant show games and sports games and whatnot. So you may recall Howard actually addressed a constituency of National Party voters and he had security guard outfit.

You remember that the bulletproof best.

Extraordinary And you can actually see there's a footage of him, I think it was Brown April May ninety ninety six when he's promoting the gun lawers and there's a wonderful photo of him speaking to a bunch of angry farmers. But you can actually see the vest yeah back and that just demonstrates my point, I think. Yeah.

And so the parties didn't split on that occasion, So there is capacity within the coalition for disagreement. Yet this time, for whatever reason, it did split.

Yeah, that gun laws is a good example. But they also disagreed profoundly on the question of Telstra. Now, Telstra used to be government owned like the Commonweth Bank and Quanas, and in the course of the late eighties and throughout the ninety nineties, labor governments under Bob Hawk and Pork Keating and then the coalition governments of John Howard and Peter Costello wanted to privatize a lot of these state entities. But Telsha was a very controversial issue because a lot of regional Australia felt that Telstra privatization would threaten their services, and so there was a real break there between the National Party leadership of Tim Fish Fisher and to a lester extent, John Anderson and John Howard and Peter Costello, and it becomes such a sensitive issue. And this, of course is at the time when we saw the resurgent, the emergence of Pauline Hanson's One Nation Party. They wrongly opposed all aspects of so called economic rational rationalism, competition policy, dairy market deregulation, privatization and so on and so forth, and the conservative wing of the National Party, essentially agrarian socialist, almost was siding with Pauline Hanson's One Nation And to the extent that those attitudes were strong in the National Party, they were fundamentally incompatible with the Liberal Party ethos of John Howard and Peter Costello.

Tom I'm going to take a quick break. When we come back, I want to talk to you about what the Liberals need to do now in order to start appealing to some of those demographics that did abandon them at the recent election, but also what it means for labor as well. We'll be back in a moment. My guest this morning is Tom Switzer from the Center for Independent Studies. Before the break, we were talking largely about some of those historical instances where the Liberals and the Nationals have disagreed. Looking to the future. Now, what do the Liberals need to do? You mentioned that this is essentially a timeout that both parties kind of needed in terms of the Libs and the Nats. What does Susan Lee, as the new leader of the party need to do during this time in order to establish the policy agenda for the party, what the Liberals stand for, and how much of that is now going to be geared towards regaining the support of voters that they have lost.

I think there are probably two things from the Liberal Party's perspective, because again, all the available evidence of these metropolitan areas, these erstwhile safe Liberal seats. You know your gold stems, I know that's probably going to go back to the Liberals. But your couyongs in Melbourne, your curtains in Perth, in Brisbane and Insygney, it's Ringa mckella and Wentworth. You're not going. The Liberals are not going to win back those seats by championing a so called cultural war agenda. I don't think they need to distance themselves from things like in opposition to the Voice to Parliament, but they don't need to be making that a big issue. I think they need to focus more on trying to win over younger people who've left the Liberal Party in droves. Women, especially professional women, are turning off the Liberal Party and I think one of the best ways of doing that is championing a smaller government agenda, one that supports market economics and housing affordability. I think this is one of the big issues for younger people. They're being priced out of the housing market, and I think there's a great opportunity for the Liberals to support more supply, more construction, more development that has its own costs as well, because there are a lot of constituencies in these Liberal areas that are creatures of habit that don't want development because they fear that that leads to congestion and more noise. But the reality is only by having more supply will you have a chance of reducing the prices for housing, and that allows younger people to get into the market. Now, there are some people in the Liberal Party who believe in that agenda. I think that has to be really their future if they want to win back a lot of those metropolitan electrics.

The Gnats don't need to change they do they in terms of it, because they have clearly still got the support of their voters. And so really it is all on the Liberal Party at this point in order to evolve and to change. But if the Gnats don't change it, it's hard to see how they do mesh together though as a future coalition.

Well, that's a great question. I mean, we started with net zero. That's a classic case in point. I mean, just say, for arguments, say the Liberals and the Gnats are back in Parliament in the next three to six to nine years and they need to address this issue. They're at loggerheads on that question. My own sense, Michael, and this is a minority of view, is that I do think that over time it will dawn on people as it has Tony Blair the form of British Prime that net zero is just unaffordable and unrealistic at least by twenty fifty. I think there is an energy transition taking place, but unless you have the technological breakthroughs, and it's going to be very difficult to reach those targets in such a relatively short period of time. So I think ultimately the Nationals will be vindicated on that. But the Liberals don't want to be talking that language now because they'll alienate those people, those metropolitan electrics who are still very passionate about a renewables only policy. So that's a real dilemma for the Liberal Party. It's not a problem for the National Party, and I should stress the Nationals aren't doing too badly electorally. They had a decent election in twenty twenty two when Scott Morrison lost power to Anthony Albernesian. This year, I think they lost one seat and what'll be wrong about that. The Liberals, on the other hand, really went backwards, especially in those metropolitan areas. So it's the Liberals who are in trouble. And from David little Prowd's perspective, you can't blame the blood. He doesn't want to be hand fisted and have his hands tied behind his back by Liberal Party policy. He's got to represent his constituencies and those two issues are new, clear and yet zero are great issues on which to deviate himself. But it will also allow Susan Lee to adopt a more progressive centrist position that appeals to metropolitan electrics.

Now just quickly because we are out of time, but as the big winner out of all of this, Labor and Anthony Albernezi, particularly when you've got such a small opposition party now in the Liberals, and really a situation where we might end up having the crossbenches in terms of the Teals, the Nationals, one Greens MP will actually make up a larger percentage of Parliament than the actual opposition the Liberals.

Look, I think what you're putting to me is the conventional wisdom. But as a student of history, I just be wary of making grand proclamations so soon after an election. You have to remember circumstances in politics can change very quickly and without warning. One of my favorite quotes is Harold McMillan, the British Prime Minister in the mid to late fifties, early sixties, and he said events, boy, events, and that was that's how we described the unforeseeable triumphs and disasters that alter party political fortunes. I think there's a lot to be said for that. Remember, in December twenty nineteen, Boris Johnson won a massive landslide election and smashed Labour's Red War constituencies, working class constituencies in northern England and the Midlands. And the overwhelming conventional wisdom in Westminster was that Boris Johnson and the Tories would have two, maybe three terms, more terms in government well within a term, and three Tory Prime ministers. Later, the Tories were wiped out by the Labor Party. Richard Nixon in nineteen seventy two won sixty one percent of the vote. He won forty nine out of fifty states in the US presidential election, and yet without eighteen months he was turfed out of parent disgrace and the Democrats, a little known peanut farmer from Georgia won the nineteen seventy sixth election. I'll give you one more example in these strain context John Howard, I want a thumping victory over Mark Latham and the Labor Party. In October two thousand and four, I was working at The Australian. The conventional wisdom in the media was that Label would have to spend two more terms in opposition. Guess what a nerd from Nambo who dined on his own you wax.

Kevin right along came Kevin O seven.

So circumstances can change quickly, Michael, yep, yep.

You never know what's just around the corner. Tom, thank you for talking to Fear and Greed.

My pleasure, Michael.

That was Tom Switzer, executive director at the Center for Independent Studies. This is the Fear and Greed Daily Interview. Join us every morning for the full episode of Fear and Greed daily business news for people who make their own decisions. I'm Michael Thompson. Enjoy your day.

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