It was the Victorian Liberal Party's darkest campaign day, two candidates gone for extreme Islamophobic and homophobic comments out of step with contemporary standards, so vile that they were both dumped on the same day.

After the Liberal Party was thrashed in the Victorian state election, former prime minister John Howard described the southern state as "the Massachusetts of Australia" a remark on the small 'l' liberal nature of the wider Victorian electorate.

It may seem incongruous that in a state that even the most senior Liberals consider small-l liberal, extreme candidates would emerge to deepen the party's image problem on key issues including race and gay rights.

Both these issues are a live problem for the party, demonstrated most searingly by outgoing Industrial Relations Minister Kelly O'Dwyer who reportedly said the Liberal Party was widely regarded as "homophobic, anti-women, climate change deniers" in a meeting following Labor's win in the Victorian election.

A sloppy vetting process

Peter Killin suggested conservatives "infiltrate" the Liberal Party to stop gay people from being elected in comments on blog posts following the preselection of prominent gay MP Tim Wilson.

Kelly O'Dwyer, who resigned in January, reportedly labelled the Liberal Party "homophobic, anti-women, climate change deniers". ( ABC News: Adam Kennedy )

He was preselected just days before the ballot draw for the inner-Melbourne seat of Wills, which is held by Labor.

After the Liberals' state election defeat, Mr Killin argued with others on a conservative blog that the way to change politics is by joining a party.

"My suggestion is to change a party from within: 1. Infiltrate 2. Influence 3. Impel. Pray and Do," he wrote last December.

His comment wasn't hard to find online, revealing just how sloppy the vetting process had really been.

Another Liberal candidate, Gurpal Singh, still hangs on as the endorsed candidate after linking same-sex parents with paedophilia during a radio interview in 2017.

The resignation of the candidate for Wills came after the party's candidate for Isaacs, Jeremy Hearn, was sacked for a hate-filled rant against Muslims that demonstrated deep-rooted Islamophobia.

Party's culture creates poll trouble for Morrison

It is the last thing Scott Morrison needs in a state where he has been struggling to rebuild after the dumping of Malcolm Turnbull and the internal ideological wars around issues including climate change and gay rights.

These signature fights have raised doubts among voters that the party is responding to the issues they are increasingly prioritising.

Senior Victorian Liberals are furious at the latest candidate revelations — privately arguing this is a consequence of their party being increasingly "stacked" by extremists and the Victorian Liberal Party head office being "out of its depth" and unable to cope with the candidate vetting process.

Liberal MPs have told me the problems can be traced back to toxic management in the Liberal Party with recruitment drives targeting conservative churches and community groups.

These developments occurred while Michael Kroger was president, who resigned after the catastrophic state election loss, to be replaced by Robert Clark.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 1 minute 20 seconds 1 m 20 s Prime Minister Scott Morrison responds to anti-gay comments by Wills candidate

Liberal MPs said the culture created was still alive and led to the latest candidate debacle despite changes on the administrative committee and the election of a new Victorian president.

One Liberal said the "clique" had sacrificed electability in pursuit of internal factional control and the party had been trying to recover since. Another said this was their legacy, "destroying the joint after they left".

Labor has problems too

Bill Shorten said the Liberal Party was "riddled with right-wing extremists" capitalising on the latest revelations.

Mr Shorten has himself had issues with candidates too — including a candidate in the Greens-held seat of Melbourne sharing a rape joke and a NT Senate candidate sharing an anti-Semitic conspiracy theory that claimed the world was being run by a secret society of Jewish shapeshifting lizards — one is gone, the other holds on.

Bill Shorten has distanced himself from Luke Creasey who several years ago shared rape jokes on social media. ( ABC News: Nick Haggarty )

It demonstrates both parties have some work to do on vetting processes but the deep-rooted issues in the Victorian party are bigger than a one-day story.

They speak to a deeper cultural and organisational problem that will be the subject of deep recriminations after the election.

The scale of the Victorian loss will define the scale of the civil war which is about to erupt.

