We are pleased to launch an Occasional Paper entitled The Future of the Two Party System: Functions, Flaws and Fixes by Dr William Stoltz and Dr Zachary Gorman.

On 22 August 2024, the Institute hosted a day-long Policy Dialogue on “The Future of the Two Party System” inviting academics, thinkers, university leadership, media and commentators to discuss the decline of the Two-Party System in Australia.

The Labor and Liberal parties are currently experiencing record low proportions of the primary vote as well as declining membership numbers. This has led, in part, to incursions by minor parties and independents into electorates historically held by Labor and the Coalition. Given these conditions, the participants examined how the Labor and Liberal parties arrived at this position and how they might go about reversing what could be terminal trends.

The event was held under Chatham House Rules (where the words are noted but not the identity of the speaker) to encourage honest and robust exchanges.

Both Dr Stoltz and Dr Gorman participated in the Policy Dialogue and this paper has been informed by the discussions on the day.

You can download and read the paper HERE.

The paper has been summarised by Dr Gorman below.

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In Defence of the Two Party System

Dr Zachary Gorman, Historian, Robert Menzies Institute

The Australian two-party system is in major structural decline. We might have fallen out of love with them, but saving this the two majors from themselves is our best chance to deliver the policy reforms essential for our future prosperity.

The election of three One Nation senators at the recent Federal election is the direct result of the major parties receiving their lowest combined primary vote since the birth of Australia’s two-party system in 1909. Labor’s strong preference derived majority papers over what has been a consistent transformation of Australian politics, the full consequences of which are still to play out.

Like them or loathe them, Australia’s prosperity and security is determined by the decisions of Australia’s political parties more than any other institution. Only major political parties with a national focus can exercise the tasks of winning and holding government. They do so through exercising two core competencies: political campaigning to win a mandate from the majority of voters sufficient to preside over parliament; and governing, which encompasses the development and implementation of a national policy agenda or manifesto.

Despite what many might think about those who have made campaigning and governing their vocation, the major political parties that have institutionalised these practices, are essential to the ability of Australia’s democratic system to produce outcomes that are in the national interest and that accord with the will of the people.

While this positive role is now overlooked, this has not always been the case. When Robert Menzies was faced with a similar existential threat to the party system that manifested at the 1943 election, he made a clear case for the necessity of ‘great parties’, united in a Burkean manner around ‘leading general principles’. Because he believed that great parties gave ‘the ordinary voter’ their best ‘chance to influence government’ by imparting a mandate, as opposed to leaving things up to horse trading with a cross bench.

Savaging a push for more Independents, Menzies declared ‘The very idea of four million adult voters in a country like this being so indifferent to the political future of their country that they are content to have no Party principles or Party allegiance, but take 74 random dips in the lucky bag at each election is the height of absurdity’.

Why then has the Australian public been increasingly happy to risk such an absurdity? The diversification of our party system certainly reflects the increasing fragmentation of Australian society. But equally, risk-averse major parties have failed to engage in policy entrepreneurialism and consequently have been offering the electorate less and less to vote for, rather than simply against.

In doing so, they have allowed the core competency of campaigning to completely overshadow the governing competency that makes the endeavour worthwhile. To reverse this trend, the major parties need to discard the prevailing ‘gradualist’ tradition of policy reform that has long characterised modern Australian politics. This ‘gradualist’ tradition is one where reform has been ground-out in protracted debates that serve to both educate the electorate and land on a compromise position where the major parties, civil society groups, business, and the public can all ‘live with’ the outcome.

The GST is emblematic of this gradual approach. The idea of a flat rate consumption tax was first considered by the Gorton Government in the 1970s – thirty years before it was finally legislated. Other examples include the NDIS (formal consultation began in 2008, fully implemented in 2020); the floating of the Australian dollar (first proposed by the Reserve Bank in 1966, floated in 1983); and compulsory superannuation (the process for economy-wide implementation began in 1983, it was mandated in 1992).

In so many of the instances of Australia’s most significant policy reforms, it has taken a decade or more for the major parties to bring them to fruition. This gradualism is arguably one of the reasons for stagnation in the major parties’ primary vote, as voters signal their frustration that change is not happening fast enough.

Gradualism has always had a place in Australian politics. It reflects the innate conservatism of the electorate and was certainly a feature of the record setting political dominance that characterised the Menzies era. But Menzies was only able to present himself as a gradualist because he kept ahead of the game and was willing to take short-term political risks in order to do so. Notably in signing an extremely controversial commerce agreement with Japan in 1957 and allowing that nation to directly invest in our burgeoning mining boom in the following decade.

Amidst our ongoing cost of living, housing and productivity crises, the major parties are going to have to take even bigger policy punts to fix the mess and re-establish our once contented electorate. If the Albanese government tries to consolidate its position without putting in the necessary work, and the Ley Opposition pursues a small target strategy in the hope they come a cropper, then we can only assume that the decline of the major parties will continue unabated.

But as much as the electorate might remain frustrated, we cannot expect the ‘lucky dip’ strategy to solve our present dilemmas.