Because their political views are rather similar, and, if they merge, the bitter competition ends.
No, the two parties had radically different politics up until the 60s. The UAP/Liberals was the party of the elites and the middle class. Policies have traditionally been grand, high minded
The Country party was the party of the farmer and the grazier, with an ideology vacillating between free trade and agrarian socialism. The party was extremely pragmatic, with its only solid policy being its hatred of the city elites, especially bankers, who stood in the way of the farmer and grazier. The party had a radically different view on government intervention in the economy, favouring vast government stimulus for rural areas when the going got tough.
The party's vague ideology is best summed up as Countrymindedness. Wikipedia describes it best:
""Countrymindedness" was a slogan that summed up the ideology of the Country Party from 1920 through the early 1970s. It was an ideology that was physiocratic, populist, and decentralist; it fostered rural solidarity and justified demands for government subsidies. "Countrymindedness" grew out of the failure of the country areas to participate in the rapid economic and population expansions that occurred after 1890. The growth of the ideology into urban areas came as most country people migrated to jobs in the cities. Its decline was due mainly to the reduction of real and psychological differences between country and city brought about by the postwar expansion of the Australian urban population and to the increased affluence and technological changes that accompanied it."
They were both centre-right parties.
No. The Nationalist/UAP/Liberal party was centre-right. The Country party had no real ideology other than Country over City. The party advocated for what was best for the country at the given time, free from ideological restraints. The best example is their economic policy, which was summed up by it's opponents as ""capitalise its gains and socialise its losses!"". When the country was going well the party advocated for free trade, low taxes and railed against tariffs. Conversely, when the going got tough in the country the party strongly pushed for state support for primary industries, high tariffs to protect australian agriculture from foreign imports, and high taxes to pay for it all, though with tax exemptions for farmers and graziers, naturally.
Honestly it would be more like the minor party joining the liberal defectors. But it really doesn't matter, Lyon's party could collapse, and the liberal Nationalists defectors can just start a Liberal Party.
The divide in the right-wing up to the 40s wasn't liberal vs conservative, that divide didn't begin until the parties conversion to Keynesianism under Menzies in the 50s.