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Liberal Party Director Analyses Election Defeat

The Liberal Party’s Federal Director, Brian Loughnane, has addressed the National Press Club on the coalition’s election defeat.

Brian Loughnane, Federal Director, Liberal Party

Loughnane said it was clear the coalition’s defeat was attributable to longer term strategic issues than short term tactical issues of recent months.

He said: “The swing away from the Government was particularly strong in some outer suburban seats in Sydney and key regional seats, and I believe these concerns with the cost of living and interest rates was an important factor.”

  • Listen to Loughnane’s speech (56m)

Text of Brian Loughnane’s Address to the National Press Club.

Mr President, Ladies and Gentlemen:

I thank the National Press Club for the opportunity of today’s address as it allows me to discuss our defeat and some of the key issues for the Party over the next three years.

I just wish it were different circumstances which brought me here. But on 24th November, the people of Australia voted clearly to change Government.

I want to make it clear that the Liberal Party both accepts the decision of the Australian people and acknowledges the extent of the loss. Doing so is the first step on the road back to Government.

We have already begun the task of reviewing the reasons for our defeat. We will do so thoroughly over the next few months in order to properly lay the groundwork to rebuild and again earn the trust and confidence of the Australian community at the next election.

Some things are already clear.

The first is that the result on 24 November was driven more by longer term strategic issues than a series of short term tactical events in the last few months, although these did unquestionably contribute to the magnitude of our defeat.

Since the election, we have conducted research among voters who switched from the Liberal Party in the seats we lost and I will set out the key findings of that research today.

There has been much commentary on the result since 24 November and much of it in my view is misguided and speculative. This is an important opportunity to set the record straight and lay out the facts. So far as I am aware, it is also the first occasion the result has been reviewed with the benefit of input from specific research conducted since the election.

The Challenge

The task confronting the Coalition in 2007 was always going to be challenging.

It is unusual for any Government in Australia to be elected to a fifth term.

The redistribution effectively removed the increased margin won by the Coalition at the last election and reduced the swing required for a change of Government from 4.4% to 2.8%. Significantly, the redistribution occurred in New South Wales and Queensland – the States that counted most in 2007 – and removed any buffer for us when the swing came.

It had been evident ever since its defeat in 2004 that Labor had been getting its act together and was building on its experience in State campaigns to refine and develop its federal campaign.

Labor used its incumbency in every State as an integrated part of its federal campaign. There are now few federal Coalition seats without at least one State Labor or Independent MP. This had both political and on-the-ground effects, especially for resourcing local Labor campaigns for the federal election and for local media reporting.

Further, eleven long-serving Coalition members retired at the 2007 election. We were defeated in five of those seats.

However, while these factors made the task of being re-elected difficult, they did not contribute directly to our defeat.

Key Reasons

In simple terms, a range of factors came together which led the electorate to conclude that while the Government had done a good job, it had run its race and change, while having some risks, was ‘worth a go’.

This sentiment for change resulted in the Coalition losing the support of some key groups in the electorate that had supported us since 1996.

The most important according to our research were parents, in outer suburban and regional areas, in the 35-49 age group.

A combination of factors came together for these voters.

The Government came to be seen as internally focused and not directly concerned or responsive to their priorities. Whether this was the case in reality or not is not the point. It is what these voters believed. Despite our increasing prosperity as a nation, many family budgets are tight. They have little readily disposable income and they expected the Government to share their concern about unanticipated rises in food and petrol prices and the ongoing increases in interest rates.

The swing away from the Government was particularly strong in some outer suburban seats in Sydney and key regional seats, and I believe these concerns with the cost of living and interest rates was an important factor.

At the same time, as the community was increasingly concerned with these cost of living issues, the Government was seen by them as being internally focused, and concentrating on its own priorities rather than the concerns of these voters.

The ongoing discussion on the future leadership of the Party contributed to this. It appeared to the electorate to be distracting the Government from what should be its real priorities (namely, the issues that concerned Australians) and helped create and then drive the impression the Government was losing touch and had no real forward agenda.

Importantly, it created confusion in people’s minds about the future and undercut our strength as the Party representing stability and certainty.

These concerns were growing though most of the term but were hidden in published polls for a long time because of concern with the leadership of the Labor Party under Kim Beazley.

Labor’s position was nevertheless improving under Beazley and when the change to Kevin Rudd occurred key parts of the electorate were looking with interest to see what his priorities would be. As the Government appeared to be distracted, Labor gained a foothold which Mr Rudd exploited though language and messages rather than by offering any real policy substance.

The fact the Government was seen to be internally focused and losing touch with the concerns of the community created an opportunity which Kevin Rudd grasped at ultimately great cost to the Coalition.

A range of other issues, including climate change, were used by our opponents to drive the impression of the Government losing touch. This helped alienate different sections of the community, including younger voters and those in inner suburban seats. The real political significance of these issues in my view was not that they changed seats but rather that they allowed our opponents to grow the sentiment that it was time for change.

Our research also showed WorkChoices was a factor in our defeat. Very few people reported they were personally adversely affected by the changes introduced under WorkChoices. In fact, those who had direct personal experience, particularly in Western Australia, tended to support the new arrangements. But this was not the politics of the situation.

WorkChoices united and activated the labour movement. Union leaders saw it as make or break for their own survival. Unprecedented resources were devoted to reversing it and the defeat of the Howard Government became the necessary first step.

The campaign against WorkChoices created anxiety in the minds of particularly public sector, clerical and blue collar workers, about what these changes could mean for them. Rightly or wrongly, people came to believe their negotiating position would not be as strong as it once was. Older people were concerned for their children and their grand children. The unions fed this anxiety with unsubstantiated claims and generalisations that the Government would go even further if it won the election.

The union campaign was at three levels: a national television and radio campaign, the funding of 22 full time campaign workers for over twelve months in key marginal seats, and I believe most importantly, a largely unreported campaign in individual workplaces.

The ACTU spent over $14 million on television advertising in the twelve months before election day. This was more than either of the two major parties spent on television in the campaign.

This development has profound significance for the Australian democracy and has been largely ignored in the commentary on the election since 24 November.

For the first time in our history, a third external force has intervened in our political process with resources greater than either of the major political parties. I believe this is an extremely unhealthy development. If disclosure of campaign spending is to mean anything in this country, the ACTU should be required to publish a report setting out details of how the $30 million it allocated to the campaign was spent.

The ‘Your Rights at Work’ campaign did not stand alone. It was fully integrated with Labor’s campaign, and gave the ALP great flexibility in deploying its resources.

I am not suggesting the union campaign was or should be illegal. What I am pointing to is a new development the implications of which have already been far-reaching and which deserves much greater and more detailed analysis than it has so far received.

The intervention of GetUp! in the campaign is another example of this phenomenon. GetUp! was well resourced and has strong international connections. It is perfectly entitled to play in the game, but it should also be subject to proper levels of scrutiny.

An important factor in our research was that economic management, including the spending promises made by the Coalition during the campaign, had little or no influence in moving votes to Labor.

In fact, the Coalition’s strength as an economic manager remained one of our strongest positive vote drivers on election day.

Simply labeling themselves as “Economic Conservatives” did not remove the concerns the Australian community still has with Labor when it comes to managing our economy. There also remains deep-seated and genuine concern, particularly in small business, about the influence of the more militant trade unions on Labor’s policy direction.

While fully accepting the result of the election, the Coalition is proud of our achievements in Government and particularly proud of the growth of our economy over the last ten years. It has helped build great prosperity for our country and given more Australians than ever opportunity and security. The legacy of John Howard as Prime Minister and Peter Costello as Treasurer speaks for itself. People will still point to this period in our history in decades to come.

The achievements of our time in Government are derived from and reflect the values of the Liberal Party. These are values we will continue to represent in Australian politics and in doing so we will proudly point to what has occurred during our time in office.

Two final additional points stood out as we reviewed the election result.

In the seats which changed hands, the Coalition was broadly competitive with Labor on the primary vote. But preferences went strongly against us. The Coalition’s share of preferences deteriorated in each of the three elections between 1998 and 2004. Although the figures for this year are not yet final, it would appear as though our share of preferences has deteriorated for the fourth election in a row.

This is a significant strategic problem for the Coalition, and will make it difficult for us to win office in the future unless addressed.

Our research showed more people made up their mind at this election which way they were going to vote before the campaign than in 2004. Nevertheless, of those who switched from the Coalition to Labor this time, about a fifth decided in the final week.

There is no doubt events such as the unacceptable behaviour which occurred in Lindsay cost us seats. It did not cost us the election but it did block out our efforts to get our message out in the final week and increased the size of our defeat.

Going Forward

Ladies and Gentlemen:

Before concluding, I would like to say something about the period ahead.

Labor has been given a clear mandate by the Australian people based on specific promises and this will be the basis on which they will be judged at the next election.

Labor has set high expectations, and voters will expect the new Government to live up to them. They made very specific promises to prevent grocery prices going up, to prevent petrol prices going up and to prevent interest rates from going up. Our research shows the Australian people are watching carefully to see whether Labor’s promises are just more spin or whether they can deliver. The Coalition intends to hold Labor to the standards it set itself. Mr Rudd declared the buck stops with him – it will not be good enough or acceptable to the Australian people for Labor to try and blame the previous Government when times get tough. The Australian people have given Labor a go based on very specific promises and they expect them to be delivered.

The Coalition is determined to win the next election. We do not subscribe to the view that a new Government will always get a second term. We require a swing of less than 2% to win and our operating assumption is that we must be ready for another election in two years – it has been Labor’s track record to go early if they can.

Since the election, we have initiated a process of reform to ensure we are well placed to fight and win the next election.

The Federal Executive of the Liberal Party has established working parties to review the reasons for our loss, our fundraising needs and the Party’s constitution. The National Party is also conducting a major review. These reviews are intended to report in the first part of next year and have been asked to concentrate on recommending practical improvements to help us win elections.

We are realistic about the challenge and the need to change. Since our defeat, the Party has systematically and strategically set about identifying what we need to do to improve and we are determined to do it.

Brendan Nelson and Julie Bishop have given a strong lead in this. The Shadow Ministry and the whole Parliamentary Party is already at work reviewing our policies, consulting and listening to the community and working effectively as an alternate government.

It is often said the Liberal Party represents the conservative and liberal strands in Australian public life. This is correct, and the Party will be tapping into their intellectual energy and vitality as we develop policies for the next election.

The policies we develop will be for the 2010 – 2013 term. Reaching out to the community and understanding their needs and concerns will be an important part of preparing these policies.

Recruiting good candidates will also be a priority for the Party. We have been well served by the strong community candidates who came into the Parliament in the 1990s and it is encouraging there is already strong agreement within the Party on the importance of actively recruiting the best possible candidates for the next election.

We are also encouraged by the strong community support we have received since the election. The Federal Secretariat of the Liberal Party has received over 1000 applications for party membership since the election. And that is just the applications we have received nationally on line. It bodes well for the future.

There is a final comment I would like to make.

During the campaign, Labor suggested a Commission be established to oversee debates during elections. It is unfortunate Labor did not consult on this proposal prior to the campaign and that it became caught up in the cut and thrust of the election. The Liberal Party would be open to considering a proposal from either the National Press Club or the Gallery for a National Debates Commission to oversee the conduct of debates in future elections. I would suggest the proposal be developed in the coming year and that the two major parties be actively consulted. The debates are in danger of having run their race. They are becoming a branch of the entertainment industry rather than an important opportunity for the two leaders to put their case directly to the Australian people. We would like to see them continue and a properly structured Commission could have a useful role in making sure this happens.


Mr President, Ladies and Gentlemen:

I am indebted to many people within the Liberal Party organisation for their hard work, dedication and support in the lead-up to and during the campaign.

In particular, I thank the leaders of the Party’s organization, our Federal President, Chris McDiven, our Vice Presidents John Calvert-Jones and Helen Kroger, and Treasurer Mark Bethwaite for their hard work and support.

I also want to thank the Immediate Past President Shane Stone and all the members of the Federal Executive.

I consider it a great honour to have been able to work closely with John Howard and want to thank him for the close co-operation which existed between the parliamentary and organizational wings of the party.

I also thank Peter Costello for his friendship and support.

I would like to thank the Prime Minister’s staff, particularly Tony Nutt, for their support and co-operation.

I particularly wish to acknowledge and thank my team at the Federal Secretariat, particularly my Deputy Linda Reynolds, who led the key seats unit so effectively, and my personal staff Sarah Jaensch and Kristian Galanti for their hard work and loyal support.

I record my gratitude to our State Directors, their staff and all our political staff around Australia including those working for retiring or defeated Members of Parliament. Many hundreds of people have lost their jobs as a result of the change of government and I strongly recommend these staff to potential employers. Political staff have tremendous skill and breadth, unique experience and have a great work ethic. Potential employers would be mad not to snap them up.

I would like to especially thank Brad Henderson, Mark Vaile, Warren Truss and all of the staff at the National Party. The Coalition works well and I am grateful to Brad for everything he does to make this possible.

Our creative team again did a great job and I thank them, particularly Mark Pearson, Ted Horton, John King, Chris Grey and Toby Ralph. Their efforts deserved a better result.

I also record my thanks to Mark Textor and the team at Crosby-Textor for their support and advice and others who provided invaluable support and advice both before and during the campaign, particularly Darcy Tronson, Jon Gaul, Ian Hanke, Peter Conran and the many, many others.

I thank the tens of thousands of Liberals around Australia who volunteered during the campaign and on election day. Your Party needs you now more than ever and I encourage you to remain active in the Party.

Finally and importantly, I would like to acknowledge and thank my wife Peta for all her support.

Ladies and Gentlemen:

The responsibility of the Coalition is to now provide a strong opposition and a viable alternate government for the people of Australia. In order to do so we need to clearly understand the reasons for our defeat on 24th November.

I trust I have today given Liberals throughout Australia a clear sense of why we lost and that it helps form the basis on which we quickly rebuild to meet the challenge of the next election.

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Malcolm Farnsworth
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