The Liberals are trying to figure out what went wrong after unexpectedly losing the by-election in the east Melbourne seat despite rising living costs.
The loss of the seat following the retirement of ex-Morrison government minister Alan Tudge was the first time a federal government has won a seat against an opposition party in a by-election since 1920.
Former unionist and breast cancer survivor Mary Doyle won the seat with a 6.5 per cent swing after cutting down Mr Tudge's double-digit margin at the federal election to 2.8 per cent.
Mr Turnbull said increasingly right-wing policies were driving voters away from the Liberal Party.
"The difficulty is that (the Liberal Party) has seemed to be focused on that sort of right-wing culture war agenda," he told ABC Radio National on Monday.
"It's clear the party has got to move back to the centre, it's got to get back to where the voters are."
Mr Turnbull pointed to climate change denial and debate on transgender rights as part of this agenda which voters were rejecting.
"All of this craziness has been infecting the party for years, that I used to battle against, and now those chickens are coming home to roost and it is electoral catastrophe," he said.
Victorian Liberal backbencher Jason Wood, the federal member for La Trobe, said the party had not done a good job at selling its policies or leader Peter Dutton.
Mr Wood said Mr Dutton was not showcased to Aston voters as someone who was tough on crime and passionate about protecting children.
Yet Mr Turnbull said Mr Dutton's problem was that the public considered him a "hard-right culture warrior".
"I'm not urging the party to make one decision or another about leaders," Mr Turnbull said.
"(The Liberal Party) have got to demonstrate they are in tune with modern Australia and in particular with generations that are younger than the average age of their branch members."
Prime Minister Anthony Albanese said he was humbled by the win which was a "significant victory" for the Labor Party and Ms Doyle.
"It was a vote for solutions which might not be perfect, but trying to get them rather than just sit sitting in the corner and saying 'no'," he told ABC Radio.
"It was a vote for those who are participants rather than observers."
But he said his government would continue to keep its feet on the ground and not get carried away by the victory.
"It means that we continue to work in a methodical way through our plan for a better future that we took to the (2022) election," he said.
The prime minister said Mr Dutton's concession speech on Saturday night showed the Liberal Party was focused on itself rather than what was best for Australians.
Liberal insiders are examining why their messaging about the rising cost of living under Labor failed to cut through to voters in the mortgage-belt seat dominated by families.
Some have blamed a "dirty" and personal campaign run by Labor against Mr Dutton, while others have pointed to voter anger at having to go to the polls for the third time in 10 months, given the by-election was triggered by Mr Tudge's departure.
Others argue the government is still in a honeymoon period, and that Australians want Labor to succeed, and point to local infighting in the party's Victorian branch.
6°C