Election Overview

The 2025 election has delivered a resounding result for the Australian Labor Party and has instigated deep soul-searching within the Liberal Party. What shouldn’t be quickly forgotten, however, is the anti-incumbency mood that dominated political commentary for so long. Before the campaign proper, globally we saw the removal of the UK Government, US administration and the rise of populism in Europe. Locally, we saw governments change in Queensland, New South Wales and the Northern Territory, in addition to changes in leadership in Western Australia, Tasmania and Victoria.

Despite all this turbulence, this election revealed that incumbency can be effectively used to design policy and then hand off communications to a well-oiled party machine. This election marks a move back to incumbency being an asset rather than a liability.

From the government benches, we felt rising optimism the incumbent could dig itself out of its political hole since January, but there were genuine nerves about the government’s ability to effectively campaign and deal with brand damage in Victoria. Fast forward a few weeks, we can now look back and say that the Prime Minister delivered his best campaign, backed by an experienced ministry and assisted by a political machine that made the Opposition the problem in voters’ minds.

Our conversations with the Opposition also detected optimism, not normally seen from a first-term opposition. It was buoyed by the referendum result and voter frustration with cost-of-living pressures resulting from mortgage repayments, power bills and grocery prices. The Opposition Leader made several bold decisions over the last term, including support for nuclear energy and more broadly, a strategy to target working-class voters in outer-suburban electorates, abandoning old liberal heartland in capital cities. Not long ago, his leadership was secure, voter support was strong, and the Coalition often led both the 2PP and head-to-heads on issues such as economic management.

The campaign, however, exposed the Coalition’s lack of preparedness on many fronts, including media engagement, policy design, effective messaging to sell these policies and a coherent campaign offering that could win seats in the electorates that mattered.

For Labor, wins often contain cracks that forecast future electoral risk. Labor’s continued low primary vote, softer voter support compared to the Coalition and an increasingly inner-urban, higher-education demographic, mean that policies going forward will have to speak persuasively to outer-urban, working-class demographics who aren’t locked in to the Labor Party as in generations past. Positively, this result is also a ringing endorsement of Labor’s inclusive language that rewards aspiration while looking after those less fortunate.

The Coalition will no doubt be doing a lot of soul-searching off the back of what has been a huge missed opportunity. Its strategy to target small business and working-class voters in outer-urban electorates may remain its best electoral strategy; however, the execution will need to look vastly different next time.

What can be expected from here to 2028? I would recommend engaging government with a huge focus on productivity – which ultimately pays for our living standards – and the campaign promises that were made. Also be prepared to engage in both give and take as the government drives outcomes it has promised. For the Opposition, now is also the time to remain connected, as you will find an openness of mind that doesn’t come very often.