The Liberal Party was founded in 1944 under the leadership of (Sir) Robert Menzies and is Australia's dominant centre-right political party. It held office nationally for 35 years in the second half of the 20th century: 1949-72, 1975-83, and from 1996. The party was established following the dissolution of the United Australia Party, and its inspiration is often traced back to the influential colonial and early federal politician Alfred Deakin. Victorians and Victorian organisations played key roles in developing the new party, particularly the Melbourne-based think-tank, the Institute of Public Affairs, which influenced the policy approach. The Liberal Party has a parliamentary and an organisational wing, and both have focused consistently on winning government. Australia's federal system of government means that there is both a federal and a State leader of the party. The leaders are elected by the relevant parliamentary wing. The successful leaders of the Liberal Party have defined the history of the party and it is convenient to divide the federal history of the party into the Menzies era, the era after Menzies, the Fraser era, the era after Fraser, and the Howard era.
Menzies, a brilliant Melbourne-based barrister and former member of the Victorian Parliament, became the point of reference of Australian politics. He remains Australia's longest serving Prime Minister, holding the office for more than 16 years and winning seven successive elections. His governments provided economic growth, low inflation, and unemployment under 2%. Menzies presided over massive immigration, and a tremendous expansion of tertiary education. An Anglophile, he nevertheless built the American alliance, established the trade treaty with Japan and increased Australia's role in world affairs.
In 1966 Menzies stepped aside voluntarily at the age of 72. Following his unbroken 22 years of Liberal leadership, there were four new leaders in the next ten years: Harold Holt, John Gorton, William McMahon and Billy Snedden. Holt, who had been treasurer and was Menzies' favoured successor, won a major election victory in his own right, but his stocks fell rapidly thereafter as he was engulfed by economic difficulties and the Vietnam War. In an astonishing and tragic drama, he drowned at Portsea late in 1967 before he had a real opportunity to set his own seal on national affairs. John Gorton, who became Prime Minister in 1968, initiated a more uniquely Australian political style, and advocated a more overtly dominant position for the Prime Minister. He won an election victory in 1969, but occasioned major disagreement within the Liberal Party. Malcolm Fraser brought this conflict to a head by resigning as Minister of Defence in 1971. Gorton called for a vote of confidence, but the vote was tied, and he used his casting vote against himself. His successor was William McMahon, previously treasurer, and the first non-Victorian to lead the Liberal Party. McMahon was unable to stamp his Prime Ministership with authority, and was engulfed in the 1972 swing to the Australian Labor Party. Liberal leaders seldom survive electoral defeats. McMahon was replaced by Billy Snedden, a Victorian lawyer originally from Western Australia, who had been treasurer in the McMahon Government. Snedden favoured a more expansive role for government, but was no match for Labor Prime Minister Whitlam. His days were numbered after he forced a double dissolution in 1974 and lost the ensuing election.
Malcolm Fraser became Liberal leader through an internal party coup in March of the tumultuous political year of 1975. A young, energetic and potent figure, Fraser, whose seat was in western Victoria, immediately applied enormous pressure to the Whitlam Government, and at the same time proclaimed a more limited role for government. He blocked supply in the Senate later that year, which provoked the dismissal of Prime Minister Whitlam by the Governor-General. Fraser became caretaker Prime Minister and won the ensuing election in a landslide. He held office for the next seven years, winning two more elections along the way. Fraser was so successful in selling his message of smaller government that his supporters complained subsequently that his performance did not match his promise. Fraser's Government emphasised responsible economic management - especially control of inflation - within a balance of policy initiatives. He surprised many with his support for environmental protection and his uncompromising opposition to South African apartheid. Like Menzies, he enhanced Australia's international role, leveraging Australia's influence as a middle-ranking power.
Following Fraser's loss at the 1983 election and his immediate resignation, the Liberal Party successively elected four leaders over the next ten years, none of whom were successful electorally in that period: Andrew Peacock, John Howard (who later returned successfully), John Hewson and Alexander Downer. The Liberal Party lost five successive federal elections. Some commentators wrote the party off, but the party organisation, especially in Victoria, focused on turning its electoral fortunes around. John Howard returned to the leadership in 1995, won the 1996 election decisively, and consolidated his position, winning again in 1998, 2001 and 2004. He focused on economic management and his 1998 election victory on the issue of a goods and service tax was a remarkable achievement which paved the way for fundamental tax reform. Howard's workmanlike approach enhanced his reputation as a capable manager, and as he moved into his third term he became a commanding figure on the national scene.
The Victorian State history of the Liberal Party has revolved around three key leaders: Sir Henry Bolte, Sir Rupert Hamer and Jeff Kennett. Following a period of instability, Bolte, leader from 1953 and Premier from 1955, became a strong and effective hands-on Premier dedicated to Victoria's economic development. He stayed, unbeaten, for 17 years. Bolte was succeeded by Hamer, who won three elections and held office for nine years. Lindsay Thompson succeeded Hamer in 1981, but the tide of support for Labor saw him lose the 1982 election, which ended 27 years of Liberal dominance in Victoria. The Victorian Liberals did not regain government until 1992, when in the midst of economic recession Jeff Kennett set about restoring Victoria's fortunes. Kennett, controversial, mercurial and successful in achieving his major objectives, dominated Victorian politics until he was surprisingly defeated in 1999. The years immediately following proved difficult for the party in terms of presenting itself as a serious contender for government.
Philosophically, the Liberal Party has changed relatively little since its formation. It was, in Menzies' words, established to unite 'those political groups which stand for a liberal progressive policy and are opposed to socialism with its bureaucratic administration and restriction of personal freedom'. A threat in the eyes of some at the time of the Liberal Party's formation, by the end of the century socialism was regarded by many as a spent force, while the Liberal Party has continued to stand by its broad belief in private enterprise and individual freedom, offering firm leadership and responsible government.
Organisationally, the party has become more professional from the 1980s. The federal secretariat was always in this mould, but at the level of the States, the branch structure remained dominant. This voluntary structure adapted itself easily to modern campaigning. From the Liberal Party's inception there was equal male and female representation at every level. Professional State directors had the capacity to organise electioneering effectively, while the determination of policy was in the hands of the parliamentary wing. The selection of parliamentary candidates was the exclusive preserve of branch representatives until the late 1980s, when reforms in Victoria gave 40% of the votes to representatives of the central Policy Assembly. These factors contributed vastly to the success of the Liberal Party in the 1990s.