Albanese solved the Trump problem from the orthodox left. So what do the Liberals do now?

With the allegedly “amicable” Coalition split turning nasty between new Liberal leader Sussan Ley and the Nationals’ Bridget McKenzie, things are looking grim for the conservative side of politics for the time being. McKenzie effectively accused Ley of misleading the public over why the Nationals wanted out, and Ley’s office shot back that she had the written proof. The “door is always open” friendliness of Monday has now been replaced with the sound of doors being slammed.

And while there’s universal agreement Ley and the pragmatists, and few remaining moderates in her party, will now have an easier time trying to reconnect with metropolitan voters, the broader right in Australia now faces a difficult challenge that encompasses not just the Liberals but the Nationals and far-right groups such as One Nation.

Anthony Albanese’s huge win has, at least in Australia, resolved the problem that has bedevilled progressives in Western countries since 2016: how to respond effectively to a disruptive populist force like Donald Trump that channels resentment and grievance on the part of white voters against minority groups and migrants while promising to overturn the existing political and economic system.

Some on the left wanted a radical approach — their own version of smashing the system with more socialist and heavily redistributive policies to disrupt capitalism and its harmful effects on workers. But the orthodox, old-guard left-wing response was to abandon any suggestion of performative identity politics and embrace a modified form of protectionism designed to stimulate traditional blue-collar male jobs, in an effort to show aggrieved and resentful voters, and especially men feeling excluded from the modern economic and political narrative, that the “system” could deliver for them as much as for anyone else, thereby removing the resentment and the desire to smash the system.

In the US, the Biden administration not merely retained Trump 1.0’s tariffs on China, it expanded them and adopted massive manufacturing programs, centred on renewables and high-tech manufacturing designed to thwart Chinese economic ambitions. But the great inflation surge caused by the pandemic and the Russian invasion of Ukraine overwhelmed the perceived benefits, even though Biden oversaw massive job creation, including in manufacturing, and wages growth, and the US Federal Reserve began cutting interest rates well before the election. Trump made the 2024 race a referendum on living standards and won easily.

Albanese pursued the same managerialist strategy as Biden: economically centrist, but with a protectionist Future Made In Australia program. However, he had more tools than Biden: he increased wages for hundreds of thousands of workers in the care sector and strongly backed higher minimum wages for all workers, while curbing the egregious excesses of the gig economy and labour hire industries. He backed Jim Chalmers’ call to take the budget back into deficit in 2024-25 to cope with the Reserve Bank’s battering of the economy. The result was a strong labour market and wages growth even as inflation fell back into the RBA’s target range.

But unlike Biden and Kamala Harris, Albanese had another advantage: voters had seen exactly what happens when you allow a disrupter who promises to smash the system to get into power and start smashing. In the financial and economic chaos that follow Trump’s return to power, and the turning upside-down of the post-WWII security environment, Australian voters could see in real time how risky it was to break the system rather than make it work better. They might not have done so enthusiastically, but voters shifted to the stability and certainty of Albanese and away from the grievance, aggression and anger of Peter Dutton and the obstructionism of Adam Bandt.

Now it’s the turn of conservative politics in Australia to work out its own solution to the Trump problem. Does it go in a more extreme direction and embrace the MAGA way, as Sky News and extreme elements within both the current and former Liberal and National parties want? Does it embrace grievance and resentment and promise to disrupt or even overthrow a rotten system? Or does it adopt a managerialist position: making the system work better for voters?

The Dutton model was an attempted combination of both: he personified white grievance and embraced culture wars (which are the right’s version of identity politics, based on white male identity) and punching downward, in the MAGA style, while trying, lamely, to offer a more effective economic system via breaking up big retailers and returning to the days of publicly owned power. In doing so, he perhaps chose the worst of both worlds, being neither fish nor fowl for those on either side, and continually being distracted from his message on what everyone agreed was supposed to be a cost of living election.

The Nationals looks as if they will continue in a more refined version of the Dutton model — they don’t want to smash the system so much as reshape it to spew money at their electorates, at the cost of the national interest. Groups like One Nation — aware that there is a solid core of old white male anger and conspiracy theorist mistrust out there to be harvested, perhaps enough to keep a Senate presence ticking over even beyond Pauline Hanson’s coming retirement — will refine and sharpen their “smash the system” rhetoric.

But the Liberals will have to find their own way on how to address the instincts of white resentment that are undoubtedly a significant part of their membership base and the need to convince voters the party can make the economic and political system work for them. The problem is that Albanese has a big head start in that contest, especially if inflation continues to fall and more interest rate cuts — caused by Trump’s chaos — continue to be served up by the RBA.

If Liberals want a way forward, they should, however resentfully, look at the continuing success of the teal independents in what was once Liberal heartland. In a parliament where Liberals are few and far between, many of the teals would make far more natural allies with the Ley-era party than anyone currently in the Nationals.