Not just electoral, but ideological: the challenges facing a Liberal party in existential crisis

The Guardian

17-07-2025

Sussan Ley was yet to officially put up her hand to replace Peter Dutton as Liberal leader when the dirt began to circulate.
A 'scorecard' spread through Liberal circles on 7 May ranking Ley, Angus Taylor and Dan Tehan – who at that stage was yet to rule himself out of the race – against a series of metrics, some more unconventional than others.
These included whether the candidates were 'beholden' to the factional powerbroker Alex Hawke (tick for Ley), had been sacked as a minister (another tick for Ley) and supported Israel (a cross for Ley, owing to past support for a Palestinian state).
Guardian Australia has confirmed the scorecard originated inside the party but was unable to verify exactly who wrote it.
But the intent was clear: to sabotage Ley's hopes of becoming the first woman to lead the federal Liberal party.
A similar subterranean campaign was launched after Ley floated ambitions for the foreign affairs portfolio in Dutton's pre-election reshuffle of his shadow cabinet.
The campaign achieved its desired outcome as Ley missed out on the role despite convention dictating the deputy leader has claims to the portfolio of their choosing.
The scorecard wasn't so effective.
Ten days after the Coalition's catastrophic election defeat, Ley defeated Taylor – and the powerful forces supporting him – to win the leadership, putting her at the helm of a party in existential crisis.
Ley inherited the leadership with the Liberal party reeling from its worst defeat in its 80-year history.
Across consecutive elections, the Liberals have lost more than 30 lower house seats, have been all but wiped out in the capital cities, deserted by women and migrant communities and abandoned by young people.
Its problems are not just electoral, but ideological. At the heart of the party's problems is a deep and unresolved rift between more moderate liberal forces and rightwing conservatives, divided on many issues, but above all the climate crisis.
In her first two months in the job, Ley and her inner-circle of MPs and senior advisers have begun the process of repositioning and rebranding the party.
Conversations with more than 20 Liberal MPs and party insiders, including a mix of Ley's supporters and detractors, indicate the step-change has been largely well received internally as senior colleagues across the factional divide rally behind the new leader.
But Ley's fledgling leadership will be tested as internal brawls over net zero and gender quotas, and the lingering animosity over a shadow ministry lineup that rewarded supporters and punished rivals, threaten to tear the party apart.
Attempts to drag the party to the centre will face resistance from powerful conservatives forces, including the former prime minister Tony Abbott, who are hellbent on entrenching the party on the political right.
'I am worried this is going to be a very divisive period,' one MP said.
In a new four-part series, Guardian Australia delves into the internal struggle to shape the future of the Liberal party, including one fringe senator's crusade to transform it from within. It will also examine the party's fraught relationship with the Nationals, and how the latest chapter in the long-running climate wars risk fracturing the Coalition – permanently.
Ley officially declared her candidacy for the Liberal leadership on 9 May, writing in a statement that Australia 'expects a change in direction and a fresh approach from the Liberal party'.
But the groundwork for the tilt was laid much earlier.
In the final stretch of the federal election campaign, between Anzac Day and 3 May, the deputy leader visited 22 seats to campaign alongside Liberal MPs and candidates.
Liberal sources says those timely seat visits were crucial for Ley in building internal support for the eventual leadership election. One MP joked they were surprised Ley didn't 'die' from the intensive travel.
Sources outside Ley's inner circle allege she was deliberately using the visits to 'manoeuvre' ahead of a potential leadership challenge against Dutton.
In doing so, she 'disappeared' from the national campaign, one Liberal said, to the point where people were asking, 'What the fuck is going on?'
The relationship between Dutton and Ley had deteriorated amid suspicions Ley's camp was leaking against the leader, including internal talking points exposing the mixed messaging on the Coalition's threats to break up certain industries in cases of market failure.
'She was clearly positioning herself for the week after the result. I didn't realise she was that cunning,' the Liberal said of Ley's apparent attempts to distance herself from Dutton.
The alleged manoeuvring is denied by those close to Ley, who say she wasn't preparing for a tilt, nor expecting Dutton to lose his seat.
Ley eventually prevailed 29 votes to 25 over Taylor after the moderates, members of her own centre-right faction and a collection of unaligned MPs swung behind her.
Despite the thin margin of victory, which was aided by votes from senators Linda Reynolds and Hollie Hughes – both no longer in parliament – and Gisele Kapterian, who ultimately lost Bradfield, Ley's camp is not concerned by the numbers.
They say they are 'relaxed' about her support in the party room, and are confident she would win by a bigger margin if another ballot were held now.
But several Liberals doubt Ley is the long-term solution. In fact, some MPs have already formed the view that the person capable of returning the party to government is not even in parliament.
'Some Liberals are discussing the WFJF – the waiting for Josh Frydenberg faction,' one Liberal source said, referring to a potential, long-speculated political comeback for the former treasurer, who lost his seat of Kooyong to the independent Monique Ryan in 2022.
Sign up to Five Great Reads
Each week our editors select five of the most interesting, entertaining and thoughtful reads published by Guardian Australia and our international colleagues. Sign up to receive it in your inbox every Saturday morning
after newsletter promotion
'People are already looking on the horizon.'
Another MP said: 'I think Sussan needs to make some decisions and take people with her very quickly, otherwise events will outpace her'.
One of Ley's closest confidantes and friends is senator Anne Ruston, a South Australian who sits somewhere between the moderates and centrists, but who hasn't been a factional player. The two are known to have honest conversations, and Ley seeks Ruston's advice.
The deputy leader, Ted O'Brien, is in the inner circle, as is Alex Hawke, a centre-right powerbroker who helped orchestrate Scott Morrison's unexpected rise to the prime ministership in 2018.
Also inside the tent are the senior New South Wales moderate Andrew Bragg, who encouraged Ley to run and made calls to colleagues on her behalf, his factional ally Maria Kovacic, and the Queensland senator James McGrath, who has been tapped to conduct a review into the party's long-term future.
Kovacic, Hawke, McGrath and Bragg were all elevated in Ley's first shadow ministry, irking internal rivals who viewed the appointments as rewards for loyalty over merit.
In her first weeks as leader, Ley addressed a core group that Dutton wouldn't: young people. She joined 25-year-old Billi FitzSimons in a podcast for the youth social media platform the Daily Aus, spoke to SBS's The Feed and Triple J's Hack program on the ABC.
To FitzSimons, Ley promised: 'I will not be in lecturing mode. I will be in listening mode.' It's a mantra she has repeated, including to members of the Chinese community – another group that abandoned the Coalition in droves – at a Sydney event on 7 July with her shadow attorney general, Julian Leeser.
On 25 June, Ley stepped on to the National Press Club stage to share her log cabin story and provide a blueprint for reform. The significance of fronting up to press gallery journalists at that forum, which her predecessor shunned for three years, was not lost on those reporters, nor her colleagues.
In her pitch for the leadership, Ley promised to be more collaborative with colleagues, who felt sidelined under Dutton's highly centralised operation.
Backbench committees will now play a greater role in shaping policy after being largely neutered during Dutton's tenure.
Victorian MP Aaron Violi, the new chief opposition whip, says it's a big opportunity for the party to open up more 'respectful and robust' policy debates, 'to give the backbench a bigger voice and ensure they have a direct line to shadow cabinet policy development'.
Several MPs, including Bragg, used the word 'open' to describe the new regime.
'It feels like we're moving into a whole new era of having a lot more openness, and frankly, I mean the idea that political parties can be these black boxes when everything's a secret, it's so passé, so I think it's been a breath of fresh air so far.'
Dr Jill Sheppard, a lecturer in politics at Australian National University, says allowing open debate and disagreement will be critical for Ley to manage – and survive – a divided party room.
'If she is to get through to 2028 [the next federal election] that'll be the key to her success,' Sheppard says.
'It won't be because of [gender] quotas or support from the moderates or anything else. It'll be an internal process of policy development that makes everyone feel included.'
Ley has made clear that she wants to empower, not control, her frontbench when it comes to selling the party's message in the media.
The leader's team has created a manual for shadow ministers to help them engage with journalists, a markedly different approach from Dutton's office, who largely shunned the Canberra press gallery.
In another change, Guardian Australia can reveal Ley will issue frontbenchers with 'charter letters' that outline expectations for them in the role.
Such letters are standard practice for prime ministers to keep their ministers in check, but are rarely issued by opposition leaders.
Of the myriad challenges facing the Liberals, the one Ley appears most desperate to confront is the task of increasing the number of women in the party's parliamentary ranks.
Women make up 33% of the Liberal party room in Canberra, compared with 56% for Labor.
At the press club, Ley described herself as a 'zealot' for action to increase female representation but stopped short of endorsing a particular method, such as gender quotas. She accepts the power to introduce such a mechanism rests with the party's state and territory branches, which are responsible for the process of selecting candidates.
Kovacic – a public advocate for quotas – says Ley is 'determined to drive change'.
'Starting with the structural reforms needed to achieve gender balance in our federal party room, her willingness to collaborate, listen and remain open-minded about how we reach that goal is a testament to her respect for members and colleagues,' she said.
The events of recent weeks in the NSW division, where even preliminary discussion of gender quotas quickly descended into internal warfare, illustrates just how difficult change will be.