Losing the Next Generation
By Freya Leach
First published in the MRC’s Watercooler newsletter. Sign up to our mailing list to receive Watercooler directly in your inbox.
Young people are now just as likely to vote for the Liberal party (~20%) as an adult is to have a landline in their house. In some metro areas, the Liberal vote among Gen Z and Millennials may be in the single digits.
Conventional wisdom said that as young people got older, they would become more conservative. But a reliance on conventional wisdom is not a political strategy and the Liberal Party needs to do more to appeal to younger generations, especially given the data suggests that young Australians consider themselves more left-wing than ever.
Thatcher, Reagan and Howard redefined the centre-right by small government, classical liberal economics and hawkish foreign policy. They took the fractured political landscape of the 1970s and created something new which identified the problems facing the West; ascendant socialism, stagnant growth, high inflation and came up with a credible plan to fix it. Most importantly, they told a deep story about the existential problems facing their respective countries.
If we are to win back young people, we can’t keep trading off the legacy of past success. The challenges Australia faces today are remarkably different and new solutions are required. Young people, rightly, feel a deep sense of anxiety about where the world is heading. The Liberal Party has failed to define the challenges successfully and as a result, the populist Left narrative prevails—that it must be the fault of climate change, corporate profits and billionaires.
That’s why the Menzies Research Centre is taking this challenge head on. We are dedicating our research and policy efforts to a project on intergenerational inequality. Our work will demonstrate how big government, growing debt and a failure to take on economic reform will hurt young people in the long run.
Young Australians today face a world that feels increasingly hostile to their aspirations. Their wages are stagnant, housing is out of reach, education standards are declining, and the institutions that once provided meaning—family, faith, and community—are faltering. Culturally and economically, they have inherited a system in decline.
Our paper will argue that Australia’s political class—especially under Labor—has failed to reckon with the scale of this crisis. It will lay out the philosophical, economic, and institutional forces shaping young Australians’ malaise and present a blueprint for reform. Winning back young Australians requires more than slogans.
A Fractured Identity
If we’re going to connect with young people, we need to understand how they think.
Modern Gen Z identity is shaped less by community, tradition, or faith—and more by the pursuit of authenticity and self-expression, where the truth is internal and subjective. The result is a fragile sense of self: easily wounded, easily distracted, and highly anxious.
The way young people think about themselves and the world is the culmination of 400 years of philosophical thinking. It began with Rousseau’s claim that “man is born free, but everywhere he is in chains” which helped inspire the French Revolution—and generations of political thought that blamed society for individual suffering. In Rousseau’s view, private property was the original sin; in today’s culture, it’s capitalism, colonialism, and Christianity that are blamed. Romanticism further elevated feeling over reason, while Nietzsche, Marx, and Darwin dismantled traditional authorities—God, religion, and human exceptionalism. The result? A world – and young people – disenchanted, disoriented, and divided.
Breakdown in traditional institutions
For young people aged 25-39, the most common domestic arrangement is living in a couple household with no children (35.7%). Couples with children have fallen from 51.5% (Boomers in 1991) to 40.7% (Gen X in 2006) and to just 21.2% of Millennials in 2021. 52% of Gen Z have no religion and 58% never attend any religious services.
Economic decline
The true state of Australia’s languishing economy has been masked by high government spending and large population growth through migration. The reality is that young people may be the first generation who are worse off than their parents.
Young peoples’ wages aren’t moving; between 2012 and 2022, real wages for full-time workers in Australia increased by just 2.6%—a stark contrast to the 16% growth seen in each of the two preceding decades. If wage growth had continued at previous rates, the average full-time worker would be earning an additional $11,900 annually today.
Housing prices have significantly outpaced wage growth. From 2012 to 2024, average wages increased by 37.5%, whereas average house prices surged by around 95%. Consequently, home ownership rates have fallen across each generation. Many young people have simply given up on the Australian dream.
While all of Australia has recorded the sharpest drop in living standards among OECD nations, young people are cutting back spending the most. Data from the Commonwealth Bank found “25–29 year olds have pulled back spending by 3.5% compared to last year. When adding in inflation, consumption shrank more than 7% year-on-year.”
When young people finally receive their wages, it’s eaten away by superannuation, HECS repayments and housing costs.
Meanwhile, Australia’s national debt has nearly hit $1 trillion – it will be young people who have to pay for this. Our ageing population and low birth rate mean the tax burden will fall on a smaller and smaller cohort of workers.
Young people are right to feel despondent. If we want to win young people, we have to redefine what the Liberal Party stands for. Of course our values of Burkean conservatism and Lockean liberalism are still relevant, but the Liberal Party needs to step up, identify the existential problems facing Australia economically and culturally, and offer some bold solutions.
Right now, my generation doesn't see an alternative to the Labor and Greens orthodoxy. If you want to help us offer a compelling alternative based on facts, please support our work by making a fully tax deductible donation to our June appeal. Our work is needed now more than ever and is only possible with your support.
