The Liberal Party of Australia finds itself at a crossroads, grappling with an identity crisis that has left it searching for purpose. Once a dominant force under the Howard government, the Coalition now faces dwindling public confidence in its economic management capabilities, a critical issue for voters. According to a December 2025 opinion poll by RedBridge Group and Accent Research, only 19% of voters believed the Coalition was best equipped to handle cost of living and housing affordability—key concerns for the electorate.
To regain competitiveness, the Coalition must refocus on economic management and housing, drawing lessons from past successes. John Hewson’s initial reforms, later expanded by John Howard and Peter Costello, offer a blueprint for recovery. However, this requires a significant shift in mindset within both the Liberal and National parties. Over the past decade, the Nationals have exerted increasing influence, steering the Coalition towards policies that resonate less with urban voters.
Challenges of a Fragmented Coalition
The modern National Party has diverged from the legacy of leaders like Tim Fischer, who balanced regional interests with urban concessions. Today, the Nationals’ approach has contributed to the Coalition’s diminishing appeal in urban areas, where the Liberal Party holds only nine out of 88 seats. This dynamic complicates the Coalition’s ability to win government, as the Liberal Party struggles to maintain competitiveness with the Nationals’ policy influence.
Compounding these challenges is the rise of One Nation, which continues to siphon votes from the Coalition. This trend reflects a fragmented electorate, with voting patterns increasingly divided among smaller political factions. In the most recent national poll, the non-major party vote reached 37%, highlighting a growing disillusionment with traditional parties.
Understanding the Voter Exodus
The shift towards One Nation is driven not by cultural issues alone but by economic dissatisfaction. The Liberal Party once appealed to male Gen X working-class conservatives with promises of economic opportunity. However, as housing affordability declines, job security wanes, and wage growth stagnates, these voters have lost faith in the Coalition’s ability to deliver on its promises. Many former Coalition voters, particularly in regional areas, feel left behind, with One Nation at least acknowledging their grievances.
Pathways to Reclaiming Voter Trust
Economic anxiety presents an opportunity for the Liberal Party to reconnect with voters. Research indicates a pervasive negative sentiment in the electorate, with 49% of voters believing Australia is on the wrong track. Additionally, 55% fear the next generation will face a lower standard of living than their parents. Despite this, the Coalition lacks a clear advantage on critical issues like cost of living and housing, areas where Labor currently holds sway.
Former Coalition voters cite a lack of clear values and unity as reasons for their shift in allegiance. To regain trust, the conservative parties must unite behind a bold economic reform agenda that offers a compelling vision for the future. This includes appealing to urban voters and those in teal seats, while returning to the successful principles of the Howard-Fischer era, where internal compromises broadened electoral appeal.
Rebuilding Through Unity and Reform
The path forward for the Liberal and National parties involves moving away from internal competition and divisive debates. Instead, they must present a unified front with a cohesive economic narrative that resonates with younger, professional, and urban voters. Failure to do so could solidify Anthony Albanese’s ambition to establish Labor as the natural party of government.
Ultimately, the Coalition’s ability to reclaim its identity and voter base hinges on its willingness to embrace reform and unity. By learning from past successes and addressing contemporary challenges, the Liberal Party can chart a course back from the brink.
