United Australia Party
The United Australia Party had been formed as a new conservative alliance in 1931, with Labor defector Joseph Lyons as its leader and John Latham, hitherto leader of the Nationalist Party of Australia as his deputy. The stance of Lyons and another former Labor minister, James Fenton, against the more radical proposals of the Labor movement to deal the Great Depression had attracted the support of prominent Australian conservatives. In March 1931, though still a member of the ALP, Lyons supported a no confidence motion against the Scullin Labor government and the UAP was formed from a coalition of citizens' groups and with the support of the Nationalist Party. In November 1931, Lang Labor dissidents chose to challenge the Scullin Labor government and align with the UAP to pass a 'no confidence' and the government fell.
With Australia still suffering the effects of the Great Depression, the newly formed United Australia Party won a landslide victory at 19 December 1931 Election, and the UAP commenced its first term in government in January 1932. The Lyons Government won three consecutive elections, pursuing a conservative fiscal policy of balanced budgets and debt reduction, while stewarding Australia out of the Depression.
Lyons death in April 1939 saw Robert Menzies assume the Prime Ministership on the eve of World War II. After a decade in office, the party had declined in popularity, and faced the demands of war in a shaky coalition with the Country Party. Forced to rely on the support of independents following the 1940 election, Menzies resigned in 1941, whereupon the UAP was unable to replace him with a suitable leader and allowed the leader of the junior coalition party, Arthur Fadden to take office. The Fadden Government lasted just 40 days, before the independents crossed the floor bringing Labor's John Curtin to the Prime Ministership just prior to the outbreak of the Pacific War.
Labor's John Curtin proved a big war time leader and the Curtin Government won in a landslide in the 1943 election. In the aftermath of this defeat, the UAP began to disintegrate, and Australian conservatives and anti-socialist liberals looked to form a new political movement to counter the Australian Labor Party.
Foundation of Liberal Party
Fourteen political parties had allied to form the United Australia Party, but disenchantment with the United Australia Party was now widespread. A group of New South Wales members had formed the new "Democratic Party". This new group looked to Robert Menzies to provide leadership. Menzies called a conference of conservative parties and other groups opposed to the ruling Australian Labor Party which met in Canberra on 13 October 1944, and again in Albury in December 1944. The formation of the party was formally announced at Sydney Town Hall on 31 August 1945.
Menzies had served as Prime Minister as leader of the United Australia Party from 1939–1941. From 1942 onward, Menzies had maintained his public profile with his series of "Forgotten People" radio talks, similar to US President Franklin D. Roosevelt's "fireside chats" of the 1930s, in which he spoke of the middle class as the "backbone of Australia" but as nevertheless having been "taken for granted" by political parties and of being effectively powerless because of lack of wealth on the one hand, and lack of organisation on the other.
Outlining his vision for a new political movement in 1944, Menzies said:
||"...[W]hat we must look for, and it is a matter of desperate importance to our society, is a true revival of liberal thought which will work for social justice and security, for national power and national progress, and for the full development of the individual citizen, though not through the dull and deadening process of socialism.
Menzies wanted the new party to be independent of interest groups like big business and so sought to organise a structure under which the Party would only receive money from individuals in small amounts, rather than from trade groups or associations.
After only modest gains against Labor at the 1946 election, Menzies saw out another three years as opposition leader – opposing Labor's efforts to nationalise Australia's banks, criticising petrol rationing and speaking out against Communism in the early stages of the Cold War. Menzies characterised the incumbent Chifley Government as "socialist". With Arthur Fadden of the Country Party as his deputy, Menzies led the Liberal-Country Party Coalition to victory at the 1949 election. He was now to become the longest serving prime minister in Australian history.