Losing government after one term is a tragedy for Victorian Liberals. But they should be even more disappointed that they didn't use the four years they had to implement the Liberal reform agenda Victoria desperately needs.
The Victorian Liberal Party cannot afford to ignore the lessons of this disappointing defeat. Attributing much of the blame to the federal government is an implausible excuse. The reality is that the Victorian Liberals trailed their opponents in the polls for almost all of their four years in government, long before Tony Abbott was elected Prime Minister.
One thing is unambiguously clear from the result — the risk-averse, moderate, cautious approach to politics favoured by state Liberals is no guarantee of re-election. Simply arguing that Liberals will be better managers of services is not a sufficient argument to stay in power. In fact, by failing to emphasise liberal values of small government, individual liberty and personal responsibility, the Coalition denied itself its best chance of retaining government.
The Baillieu-Napthine era is certainly not without achievement. Its budget management is the envy of the federation, with a prized AAA credit rating and budget surpluses forecast for the foreseeable future. It unquestionably delivered on its promise to get tougher on law and order. Planning reforms have increased the sorely needed supply of housing. The government's much-maligned vocational education changes were clearly necessary. Long-overdue reform of the taxi industry was enacted. The hard line on industrial relations was welcome, although the failure of police to enforce the law in the Baiada Poultry dispute was disappointing.
But the truth is few Liberals honestly believed they were going to win the 2010 election. As a result, the deep thinking about a policy reform agenda that should take place in opposition largely did not occur. Renewal of the parliamentary party did not go far enough. Unsurprisingly, this meant the government got off to a very slow start, and in the absence of their own clear agenda, too many ministers took the lead from their departments with little regard for whether their recommendations were consistent with Liberal principles.
Sadly, this culture affected many areas of government. In education, the government bowed to union pressure and backed away from introducing performance pay for teachers. They happily signed on to Julia Gillard's left-wing and substandard national curriculum. In health, they uncritically advanced nanny-state policies such as banning solariums and smoking outdoors at restaurants. In transport, they promised "free" tram travel in the CBD — a policy straight out of the Greens playbook. The government picked an unnecessary and unhelpful fight with the federal government over freedom of speech, and neglected to address widespread concern about the impact of the human rights charter on Victorians' freedoms.
On jobs — a key issue for voters — other than modest rebates on payroll tax and Workcover premiums for businesses employing long-term unemployed youth, the government's plan was to hand private businesses grants of taxpayers' money in the hope this would create employment. This is not only economically ludicrous but also politically unconvincing. Where was the all-encompassing Liberal pro-growth agenda of tax cuts and deregulation? An ambitious agenda for reform like this could have captured the attention of the electorate and convinced voters the government had a vision for the future.
Instead, the government's re-election strategy appeared to be to try to convince Victorians that Liberals would be more generous with taxpayers' money than Labor. That's not a fight the Liberal Party will ever win.
The result was a stunning rejection of auction politics. The Liberals' efforts to outbid Labor with more lavish election promises were a complete failure. Premier Denis Napthine's frenetic and extravagant spending announcements clearly failed to save his government, or meaningfully dent Labor's lead.
It's even clearer at a seat-by-seat level that this approach didn't work. In the marginal seat of Yan Yean, the Coalition's promises tallied an extraordinary $1 billion — almost double the figure pledged by Daniel Andrews. And yet on the counting so far, the swing against the Napthine government in Yan Yean is actually marginally above the statewide average. In Shepparton, the Coalition government didn't just promise cash for voters — they already delivered it in the form of a $22 million bailout to SPC Ardmona. And yet the Nationals have suffered a 32 per cent swing in their second safest seat and look set to lose it to an independent.
Like far too many of the decisions made by the government, the bailout of SPC was utterly divorced from liberal principles. Thankfully, the next generation of Liberal leaders are more obviously committed to adhering to liberal philosophy. Both former treasurer Michael O'Brien and former planning minister Matthew Guy are thoughtful proponents of classical liberal ideas.
Whoever prevails in the leadership contest this week, the new leader will need to set a clear example from the first day. The Victorian Liberal Party needs to explain to voters why their values equip them to bestlead the state. Every policy must be tested against liberal philosophy. They must offer an ambitious agenda of reform.
The alternative, of de-emphasising liberal values and instead simply auditioning to be the best service-delivery manager, is a proven failure.
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