The historic crisis wracking the traditional conservative parties of the ruling class following their defeat at the May 3 federal election was underscored yesterday, with the Liberal and National parties announcing that they would not enter into a coalition agreement. 

For several days prior to yesterday’s announcement of the break-up of the Coalition, there had reportedly been intensive backroom discussions, including between Ley and Nationals leader David Littleproud. 

The Nationals had reportedly advanced four “non-negotiable” policy demands, including for a maintenance of the Coalition’s support for nuclear power, a recently-announced $20 billion funding initiative for the regions, a bill to compel mobile networks to provide coverage in rural areas and for the divestiture of major supermarket chains. 

The regional fund and mobile policies were uncontroversial. The policy most likely to spark division was the commitment to nuclear power, which was widely unpopular, and which a number of Liberals are therefore considering dropping.

Liberal figures have bitterly complained to the media that the four policies were “a ruse.” The Nationals knew that Ley could not give any ironclad policy guarantees, under conditions where a review has only just begun of the Coalition’s disastrous election campaign. 

The Nationals determination for a split was made clear by Littleproud’s reported demand that Nationals MPs be permitted a “free vote” in parliament, including on issues of contention with the Liberals. Many Nationals figures have long opposed the Liberals nominal commitment to zero carbon emissions by 2050, for instance. Such a “free vote” would mean the end of any shadow cabinet discipline, effectively rendering the Coalition a dead letter.

The rift followed a wipeout of the Liberals, traditionally the urban and dominant component of the Coalition, at the election. The party received its lowest vote since it was formed more than 80 years ago, with a swathe of MPs including Liberal leader Peter Dutton losing their seat.

That loss was above all the outcome of a widespread popular repudiation of US President Donald Trump and his program of economic war, militarism and authoritarianism, with which Dutton and the Coalition were associated. It followed years of conflict within the Liberal Party, which have marginalised an erstwhile “moderate” faction, which now largely exists in the form of Teal independents outside the party.

The Teals, who emerged in 2022, consolidated their hold over a series of “blue-ribbon” seats in Sydney and Melbourne that the Liberals had traditionally held. Despite primarily being an urban party, the Liberals now hold only a handful of seats in the major capital cities. 

In the 150-member House of Representatives, the lower house of parliament, the Liberals have been reduced to just 28 MPs, down from the 42 they held after a major defeat in 2022, and the 61 they secured in their last election victory in 2019. Overall, the Liberals have lost a cumulative total of almost 50 seats beginning at the 2016 election.

By contrast, the number of seats held by the Nationals has remained stable over more than a decade, at either 16 or the current 15. Under those conditions, the traditional dominance of the Liberals over the Coalition, including its selection of leader and hold over the key cabinet or shadow cabinet positions, was always likely to be challenged.

The inevitable jockeying over control of the Coalition, under conditions where the weight of the Liberals had been greatly diminished, was intensified by factional conflicts immediately after the election. The Liberal disaster has provoked widespread recriminations within the party, as well as sharp criticisms from National Party figures.

With Dutton ousted, the Liberals were compelled to elect a new leader. 

On the eve of the ballot earlier this month, Jacinta Price of the Northern Territory’s Country Liberal Party (CLP) announced that she would leave the Nationals party room and sit with the Liberals. CLP representatives from the Territory have always previously aligned with the Nationals. 

Price declared that she would run for deputy leader of the Liberal Party, on a ticket with Angus Taylor for leader. The two advanced the same Trumpian talking points that had been massively rejected in the election itself. Ultimately, in the ballot just last week, Taylor was defeated by Sussan Ley, a supposedly more moderate figure, but only by a handful of votes.

Price’s defection, clearly encouraged by Liberal figures such as Taylor and aimed at bolstering Liberal numbers within the Coalition, reportedly infuriated the Nationals leadership. The anger was compounded by financial and logistical considerations. Losing Price meant the Nationals fell beneath the five MPs required for official party status in the Senate, depriving them of substantial state financing there.

Agreements, between the urban and regional-based conservative parties, have been a feature of official Australian politics since the 1920s. Since 1946, the coalition between the Liberals and the Nationals (previously the Country Party), has been severed only twice before—in 1972 until 1974, and again briefly in 1987. 

The previous split of the Coalition occurred in 1987. The Nationals backed the campaign of far-right Queensland Premier Joh Bjelke-Petersen to become prime minister. The division ensured the re-election of the Labor government of Prime Minister Bob Hawke and contributed to the Liberals and Nationals being in opposition for the best part of another decade.

Yesterday’s break-up of the Coalition, however, is of a far more fundamental character, because of the advanced political crisis within which it occurred. 

The Liberal Party is in an existential crisis. Whatever becomes of it, the least likely variant is its return to the stable, urban conservative party that it once was. That is because the social base for such a formation no longer exists. The broader stratum of the middle-class that was the constituency for the Liberals has collapsed as a result of a massive social polarisation. 

At the same time, as with conservative parties around the world, the Liberals have been riven by factional conflicts. That has reflected the global rise of far-right and even fascistic forces, promoted and sponsored by elements of the ruling elite to shift politics further to the right and develop authoritarian mechanisms in response to growing social opposition.

While less dramatic, there is also a crisis of the National Party. It faces pressure from various independents, including right-wing populist figures, and has itself been the site of conflicts between more “moderate” tendencies and populist layers. Absent the coalition, the Nationals will be confined to the backbench of parliament, while the Liberal rump will constitute the official opposition to the Labor government.

While the collapse of the coalition is seemingly a further victory for Labor, it is the opposite. For the past eighty years, the two-party system has served to divert and suppress popular opposition while devising the policies of the capitalist class. In the absence of a Coalition opposition, the ruling class is entirely dependent on Labor to enforce its agenda.

That agenda is an inherently unpopular one, including massive cuts to social spending, to force the working class to pay for the deepening economic crisis, and a vast expansion of the military in preparation for war, above all for a US-led conflict with China. The government will face mounting social opposition, and will be roiled by continuing global upheavals, amid a historic breakdown of world capitalism.