Since most Australians have been shaped by the same language and by a similar cultural and religious heritage, their internal differences are largely based on economic issues. Attachments to the UK are compounded of sentiment, tradition, and economic advantage. Australian nationalism has been associated more closely with the Australian Labour Party (ALP) than with its rivals, who tend to regard Australian interests as almost identical with those of the UK. Because of Australia's geographical position as a "European people on an Asian limb," the economic element in its nationalism has been mixed with the fear of external conquest or domination.
Except in 1929–31, when a Labour government was in office, interwar governments were dominated by non-Labour groupings. When war seemed certain in 1939, the government was resolutely imperial, considering Australia to be at war automatically when the UK went to war. The Laborites challenged this view. While they did not oppose a declaration of war on Germany, they wanted the step to be taken so as to show Australia's independence.
Labour was in office from 1941 to 1949. The Liberal and Country Parties were in office as a coalition for a long period afterward, from 1949 to 1972, and again beginning in December 1975 (by that time, the Country Party had become the National Country Party, and it later became the National Party).
In the general elections of 13 December 1975, a caretaker government, formed the preceding month by the Liberal-National Country Party coalition after the dismissal of the Labour government of Prime Minister Gough Whitlam, obtained large majorities in both houses of the legislature. Although its majorities were eroded in the elections of December 1977 and October 1980, the coalition remained in power until March 1983, when Labour won 75 out of 147 seats in the House of Representatives. Robert Hawke, leader of the Labour Party, took office as prime minister; he was reelected in 1984, 1987, and 1990. Paul Keating replaced Hawke as Labour's leader, and as prime minister, in December 1991. This was the first time an Australian prime minister had been ousted by his own party. Keating led the ALP to an unprecedented fifth consecutive election victory in the 1993 general election, increasing both its percentage share of the vote and its number of seats in the legislature. In 1996, a Liberal-National Party coalition headed by John Howard ousted the ALP from the majority, with the Liberal-National coalition winning 94 seats compared to the ALP's 49 seats. John Howard was reelected prime minister in 1998 and 2001.
A direct descendant of the governments of the 1920s and 1930s, the Liberal-National coalition is principally linked with business (Liberal) and farming (National) and is officially anti-socialist. In economic and foreign affairs, its outlook is still involved with the Commonwealth of Nations, but it supports the UN, as well as the alliance with the United States in the ANZUS pact. It is sympathetic toward the new Asian countries and values the link with these countries afforded by the Colombo Plan. The Labour Party is a trade-union party, officially socialist in policy and outlook. It initially maintained an isolationist posture, but since the early 1940s, its policy has been a mixture of nationalism and internationalism.
Smaller parties include the Democratic Labour Party, the Communist Party, the Australian Democrats Party, the Green Party, and the One Nation Party. Since its formation in 1997, the One Nation Party's platform has featured racial issues. In the 1998 Queensland state elections, it won 11 of 89 seats. In the federal elections of that same year, the One Nation Party called for an end to Asian immigration and a restriction to Aboriginal welfare programs, but failed to win any seats. The Green Party increased its strength by 2.3% in the 2001 elections, while the One Nation Party lost 4.1% of its strength.