The Nationals are openly contemplating ending the Coalition, The Liberals are openly criticising and plotting against their party leader, and most delusional of all, half of the Coalition thinks that the voters will reward them at an election for denying the existence of climate change and being obstructive on the issue - at a time when almost all businesses are acknowledging something needs to be done and flocking behind either Rudd or Turnbull's carbon reduction policies, along with an electorate in which 70% to 80% of voters support a carbon reduction policy (including a full half of all Coalition voters).
Not to mention the obvious: the global financial crisis and Australia's subsequent rapid recovery from it made an abject mockery of the Liberal party's claims that Labour would only lead us to financial ruin and tax hikes (Rudd actually lowered taxes).
Rudd is the only PM in history to achieve and sustain two years into his term the same record high approval rating he had when he became PM; every other PM has rapidly lost ground to the opposition, often such that the opposition becomes the preferred political party. Whether you attribute this to Rudd's success or the Coalition's failure is largely irrelevant; it's an ominous sign for the Coalition.
For reference, in the latest Newspoll, 31% of respondents would vote Liberal, while 46% would vote Labour. That's possibly one of the worst results in the Liberals's history. 4% would vote Nationals, 10% Greens. If an election were held today, Labour would have twice as many House seats as the Coalition, compared to just the 25% more it holds currently.
I'm not silly enough to assert that the Liberal party is extinct, but it's certainly evident that they've done permanent damage to their brand and ideology. The kind of damage that takes 3 or 4 lost elections in a row to repair.
And that even ignores the demographic crisis they face as they emulate their Republican counterparts in America: appealing more and more to the shrinking population of old white rural men as their opponents embrace the expanding pool of youth and immigrants.
I figured Turnbull might be someone to turn the Liberal party's fortunes around in the long-term, but now I don't think he'll survive long enough as leader to get a chance. And besides, he's too hotheaded.