Well, now we know. Australians didn't vote their pocketbooks on Saturday, but rather, their fears on global warming, the war on terror, and industrial relations. John Howard's Liberal Party government was kicked out of power in one of the worst electoral defeats for an incumbent government since World War II—to a bland, younger, Mandarin speaker, the Labor Party's Kevin Rudd. The defeat was so total that Mr. Howard may even lose his own Parliamentary seat.

Put the loss down, first, to hubris on the part of the incumbents. Mr. Howard stayed in office for too long, and didn't give his No. 2, former Treasurer Peter Costello, a chance to take the reins. That would've been risky — Mr. Costello consistently polled 20 percentage points behind the younger Mr. Rudd — but given Saturday's bloodletting, worth it, in hindsight. Blame here goes, too, to the former Liberal cabinet, which couldn't muster the nerve to kick Mr. Howard out in September, when the leadership crisis hit a peak.

Mr. Rudd also deftly outmaneuvered Mr. Howard on the economy, positioning Labor as a centrist party, able to keep the economy on an even keel. The Labor Party stalwarts — trade unionists, all — held their noses but plowed ahead, knowing this was the only way to make themselves electable. Then Mr. Rudd distinguished Labor from the incumbents by zeroing in on the environment, Iraq, and industrial relations.

That put Mr. Howard on the back foot, scrambling to come up with a “new” message. And then Labor really piled it on, placing smart, presentable candidates in key Liberal party constituencies; candidates like former ABC journalist Maxine McKew, who ran in Mr. Howard's “safe” Bennelong seat in the Sydney suburbs. Ms. McKew campaigned door to door while Mr. Howard was stuck running national affairs. Clever politicking, for sure.

The Liberals now are scrambling to regroup. Mr. Costello bowed out of politics, and the other Howard stalwart, former Foreign Minister Alexander Downer, has also said he won't stand for leader. That leaves Malcolm Turnbull, the former Environment Minister, and Brendan Nelson, the former Defense Minister, in the lead. But both are far from perfect candidates; Mr. Turnbull, while personable, is inexperienced politically, and Mr. Nelson, while competent, is just as bland as Mr. Rudd.

Saturday's result also presents a problem in terms of platform for the Liberals. Given that the election was won on soft issues of the left, the new leadership may be tempted to pull a David Cameron and swing left, too. But that would alienate the Liberal Party base. The Liberals may just have to wait until Mr. Rudd drives the economy into a ditch for voters to remember why they elected John Howard and his Liberal gang in the first place.

Ms. Kissel is editorial page editor of The Wall Street Journal Asia.