The Liberal Party of Australia is often considered, paradoxically, to be a conservative party. Although there is a case for this accusation, the true situation is that it may more accurately described as the "Anti-Labor Party".

This is evident in its history - the original precursor to the modern day Liberal party was a coalition of Protectionists and Free Traders. Similar ideological contradictions exist today with the Liberal Party.

Although, unlike the Labor party, there are no formal factions, there are indeed informal groupings based on ideological lines within the Liberal party. Generally these groupings are more personality based - ideology typically being used as a factional recruitment tool.

These groupings can be roughly summarised as follows:

  • The Conservatives, who are typically pro-monarchy, anti-immigration, anti-welfare, and pro-family. The current Prime Minister of Australia and leader of the Liberal Party, John Howard, is an avowed conservative. Oddly enough, he is possibly also the most reformist PM Australia has had, introducing the Goods and Services Tax, banning automatic firearms and drastically changing immigration policy.
  • The Economic Rationalists, who believe in near total market deregulation and internationalisation of markets. On social policy they can be either conservative or liberal.
  • The small-l liberals, so called because they believe in what they see to be "true" liberalism, that is, minimal government intervention, equal opportunity, tolerance of different races, creeds and religions, and limited welfare payments to the needy. This camp is usually also pro-republic.

Therefore, inasmuch as the word "liberal" is defined as promoting tolerance, respect and diversity, the Liberal Party of Australia must surely be considered to be so, since it has such a diversity of beliefs within what it calls its "broad church" of members.

However, it is without a doubt on the "right" side of politics compared to its main rival The Australian Labor Party, given that the bulk of its members support low taxation and low welfare payments, and thus must be also considered conservative.

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