A by-election for the federal seat of Farrer on Saturday witnessed one of the starkest declines in the vote of a major party in recent political history. The Liberal Party, which held the seat at last year’s May federal election, received only 12.4 percent of the vote, a swing against it of 31 percent in just 12 months. 

David Farley, the candidate of the far-right anti-immigrant One Nation party won with over 39 percent of the primary vote. Underlining the extent of the Liberal collapse, the contest was between Farley and independent Michelle Milthorpe, who received more than 28 percent of the vote, over twice that of the Liberals who came a distant third.

The outcome was not an aberration, but the latest in a series of catastrophic results for the Liberal Party, the traditional conservative urban party of the ruling elite. 

A long-developing crisis found explosive expression in the 2025 federal election, with the Liberals receiving their worst vote since the founding of the party in 1944, and retaining just nine out of 88 metropolitan seats. In last month’s South Australian state election, the Liberals were reduced to a rump, holding just 5 of the 47 seats in the lower house of parliament. 

This is an existential crisis, not only of the Liberals, but of their Coalition with the regional and rural based National Party. After decades of increasing social polarisation, the relatively large middle-class base of the traditional conservative outfits no longer exists. And in the Farrer result, as in the South Australian election, One Nation is successfully making a right-wing pitch to discontent, not only with the Coalition, but with the whole two-party set-up including Labor.

One Nation’s rise can only be understood as a result of the lurch to the right by the entire political establishment, epitomised by Labor, which is implementing an agenda of war, deepgoing austerity and an assault on fundamental democratic rights.

Like all by-elections, there were specific issues in Farrer, a sprawling electorate in the south-west of New South Wales. It includes large rural and farming areas as well as a number of regional towns. The electorate is relatively middle-class and has been held by one or other wing of the Coalition throughout its 77-year history.

Even the immediate issues in the by-election and its circumstances were completely entwined with the existential crisis of the Liberals and the Coalition.

The election was triggered by the resignation from parliament of the sitting Liberal member Sussan Ley. She had become the Liberal leader in the wake of its wipeout in last year’s election. 

Ley had attempted an increasingly hopeless balancing act, trying to maintain a fragile truce between “moderate” Liberals and more hard-right factions, while repeatedly capitulating to the latter. She also desperately sought to maintain the Coalition, which ruptured twice in the course of little over six months.

In February, Ley was ousted by Angus Taylor, identified with the more right-wing Liberal factions. Her resignation had the character of a parting shot triggering a by-election that the Liberals were always likely to lose. The scale of the defeat, however, demonstrates that the leadership change has resolved nothing for the Liberal Party.

The campaign also revealed the extremely tenuous character of the Coalition patch-up. The Coalition was unable to settle on a single candidate, with the Nationals also contesting. Their vote of just under 10 percent underscored the reality that the crisis is not just one of the Liberal Party. The Nationals’ low vote had a broader significance, given the regional and rural character of Farrer, which parallels that of everywhere else the party has seats.

For its part, Labor did not stand a candidate. That was an admission that its own result would have been similar to that of the Liberals. Labor’s failure to stand effectively aided One Nation. So too did the decision of the Liberals and the Nationals to preference One Nation over Millthorpe, who polling had indicated was the only contender to defeat Farley.

Those circumstances underscored the extent to which the major parties, amid a crisis of the whole two-party system, are effectively rolling out the welcome mat to One Nation.

As One Nation did in the South Australian election, Farley presented himself as a political outsider and an opponent of the major parties. He pitched to discontent over the cost-of-living crisis, under conditions where fuel prices and inflation are surging as a result of the criminal US war against Iran, which the Labor government has supported. Labor is imposing the cost on ordinary people, including through far-reaching austerity measures to be included in its annual budget tomorrow.

Farley raised the crisis of healthcare, which is particularly acute in many regional and rural areas after decades of funding cuts by governments, Labor and Coalition alike. He also appealed to anger among farmers, over the rising cost of water and other essentials.

As in all of its campaigns, One Nation’s catch-all appeal to hardships and discontent was held together by a nationalist xenophobia. The phony populist pitch was combined with a vicious assault on migrants and refugees, who One Nation scapegoats to divide the working class and shield the source of the deepening social crisis, the ultra-wealthy and the capitalist class.

But One Nation’s ability to spew its venom unchallenged by the political establishment is because all of the official parties are engaged in the demonisation of “foreigners,” in line with escalating militarism and an assault on the working class.

The increasingly dominant hard-right factions of the Coalition have no differences with One Nation. In March, the Nationals installed as their new leader Matt Canavan, whose bogus regional populism and frenzied denunciations of immigrants are identical to those of One Nation. 

In his remarks on the Farrer defeat, Liberal leader Angus Taylor channeled One Nation leader Pauline Hanson. He declared that the Liberals would increasingly campaign against “mass migration,” and any measures, however threadbare, to address climate change.

On Sunday, Coalition MPs, ranging from the right-wing Nationals Senator Bridget McKenzie, to one of the few remaining “moderate” Liberals, Tim Wilson, would not rule out the possibility of forming a coalition with One Nation. 

That is a signal that the far-right outfit is increasingly being integrated into the political establishment. As is the case internationally, a transformation of right-wing politics is underway, with the old conservative parties being displaced by far-right populist and even fascist outfits. And like elsewhere, in Australia this process is being stewarded by sections of the ruling elite. Over the past year, mining magnate Gina Rinehart, the country’s wealthiest individual, has identified herself more and more with Hanson and One Nation.

But above all, One Nation is the leaven of the right-wing policies of Labor. Over decades, Labor governments and their affiliated trade unions, thoroughly corporatised, have imposed an unending assault on the jobs, wages and conditions of the working class. That has created the social discontent, to which One Nation makes a pitch.

And Labor is above all a party of imperialist war, a component of which is the promotion of frothing nationalism. The federal Labor government has, over the past several years, supported a US-Israeli genocide of the Palestinians in Gaza, presided over a massive military build-up in preparation for war with China, and has backed the massive crime of the war against Iran, the opening shot of a global conflict.

That has gone hand in hand with massive attacks on democratic rights, including provisions to illegalise organisations and even political parties that fall foul of sweeping “hate speech” laws that target opponents of war. While imposing the biggest reversal to working-class living standards in decades, Labor has scapegoated immigrants and refugees, in line with its character as a nationalist party that was founded in support of the openly racist “white Australia” policy.

Labor has not only opened the door to One Nation. The differences between it and the far-right formation are over messaging, not substantive policies. Increasingly, Labor is implementing an agenda that itself has a far-right character, whether on the issues of war, austerity or authoritarianism.

The by-election was held just three days before Labor presents its federal budget, which will include some of the deepest attacks on social programs in history. Already protests have been held against the foreshadowed $35 billion cut to the National Disability Insurance Scheme, upon which 760,000 disabled people rely. 

The response of all the major parties to what is a crisis not just of political organisations but of bourgeois rule itself, is a further shift to the right.

The urgent issue is to build an independent political movement of workers, directed against the entire political establishment and above all, the Labor government. Such a movement, uniting the social and political strength of the working class, rejecting all forms of nationalism and xenophobia and advancing a socialist perspective, is the only means of combatting a capitalist system that is hurtling to barbarism.