In May, immediately after the 2025 election, debate swirled about whether the Coalition agreement would survive. The consensus was that it would be madness for the Liberals and the Nationals to part ways. Nonetheless they did so, briefly, before awkwardly reconciling. It was not a convincing display.

Fast forward four months and the Liberals are riven by factional conflicts on net zero and immigration, driven by actors from the National Party, including former leaders Barnaby Joyce and Michael McCormack, and recent Nationals defector Jacinta Nampijinpa Price. Some who have been touted as future party leaders are threatening to quit^[1] the frontbench over a net zero target 25 years away.

Many will be asking how the Liberals got to this point. But I think the more interesting question is where they might be headed.

Internal conflict has a long history

The first thing to note is that conflicts over immigration and climate change are not new.

The Liberal Party is a hybrid conservative-liberal party. This means it’s an awkward coalition of liberal and conservative interests, which united to oppose organised Labor more than a century ago, and have undergone various transformations and iterations since.

From an ideological perspective, some principles these different groups hold are contradictory. These include, for example, how much the state should get involved in people’s private lives, or an ongoing tension between economic or social “progress” and tradition. These differing worldviews can cause problems.

The Nationals add an additional layer of complexity, because the shared Coalition party room allows members of the Liberal Right to form policy coalitions across the party divide, placing additional pressure on the moderate faction.

Within the Liberal Party, ideological differences are usually managed by the disciplining incentive of government or an overwhelming desire to win government. But at times like these, on the back of two catastrophic election losses, those guardrails are nowhere to be found.

Unlike Labor, the Liberal party doesn’t have a formal factional system, which means it doesn’t have a bargaining infrastructure to help manage disputes. This means the way the Liberals resolve internal conflicts is through leadership change and, inevitably, one faction dominating the other.

Again, the Nationals complicate this, because their additional numbers in the Coalition party room create more opportunities for policy entrepreneurs within the Liberal Right to push conservative policy positions. It’s not just numbers, but powers too, as Opposition Leader Sussan Ley is limited in her ability to exercise authority over Nationals members who are not in the shadow cabinet.

In many ways, the events of the past week have a familiar pattern to political observers. But the difference is the overall political landscape.

Australia is undergoing a realignment in how citizens vote. This means Australian voters are no longer as rusted onto a particular party as they have been in the past. It also means the Australian party system, like those in other Western democracies, is in flux.

So, is this the beginning of the end for the Liberal Party?

Unlikely.

Despite all the existential talk about the Liberal Party, there remain significant institutional ballasts and supports. These range from public funding (including payments to help parties run administration and IT security), party infrastructure, volunteer networks, bricks-and-mortar buildings, brand recognition and even exemptions from Australia’s privacy laws.

There are also all the privileges the Liberal Party receives as the official opposition, including additional salaries, staff and resources to assist with policy formation, and the rights and powers of our legislative chambers such as question time or the budget reply.

It is really hard to build a successful new party – most fail – so while the Liberal Party might be in serious institutional decline, it remains worth fighting for.

But something is happening to the Liberals

On top of the advantages listed above, voters think of the Liberals as the natural governing alternative to Labor.

However, as noted above, the Australian party system is in flux. The 2025 election saw the return of most of the teal independents. With each election cycle, the habit of voting Liberal weakens, particularly as fewer voters are switching to conservative parties as they age. The cohort of “rusted-on” Liberals is ageing and is not being replaced at the same rate.

If the Liberals spend multiple cycles not engaging with the median voter, and can’t articulate a credible alternative story about the Australian economy, it does raise the question: who will voters turn to when they decide to throw Labor out?

To be clear, it is healthy for political parties to debate policy. But the crucial thing happening to the Liberal Party while it undertakes these policy debates is that Australians are voting out the moderates from the party. By switching to the teals in the Liberals’ former blue-ribbon seats, voters are removing the traditional elite of the party.

If you don’t believe me, consider the example of the Victorian Liberals, who keep losing to a long-lived and unpopular Labor government. The risk for the Liberals is that there comes a point where there is no viable future for a moderate Liberal in the party. It is no longer worth fighting over the remaining institutional infrastructure and brand advantage. In this situation, those candidates (and their voters) would need to find a new political home.

That could lead to a situation where there are three parties on the right needing to cooperate to form a governing coalition. Another alternative might be a merged National and Liberal Party that would form a coherent conservative party and would seek to work with a new liberal force.

This is why the debate inside the Liberal Party is important. But that’s also why it matters that it does not appear to be happening in a constructive way that would lead to a new consensus. Instead, it looks like a set of factional power plays.

Incidentally, immediately after losing the 2022 election, Scott Morrison advocated^[2] for a future in which the Liberals and Nationals merged and a new Liberal force emerged in the centre. Morrison was always highly rated as a numbers man. Perhaps he will be right about the Liberal Party’s future, too.

References

1. ^{^} threatening to quit (www.theguardian.com)
2. ^{^} advocated (www.theaustralian.com.au)