He won Liberal preselection for the Division of Flinders against a large field of other candidates. Between 1968 and 1972, Lynch served variously as Minister for the Army, Minister for Immigration, and Minister for Labour and National Service, under Prime Ministers John Gorton and William McMahon. In opposition from 1972 to 1975, he was Deputy Leader of the Liberal Party. He was also the Deputy Leader of the Opposition as then Liberal leader Billy Snedden had refused to give the title to the Country Party leader Doug Anthony. After his party won back government in 1975, Lynch continued as Deputy Leader of the Liberal Party until his retirement in 1982. Opposed to the “white Australia policy” and Australia's restrictive immigration regime, as Minister for Immigration in 1970 he toured Europe in a successful drive to recruit workers for Australia’s underpopulated workforce, meeting with the leaders of several nations and Pope Paul VI. A conciliating presence between opposing factions both within and outside his party, he was also partly responsible for exposing the Khemlani loans affair that, although Lynch was not actively involved, was to contribute to the dismissal of the Whitlam government and election of Malcolm Fraser as Prime Minister in 1975. Malcolm Fraser appointed Lynch Treasurer in 1975. When the Treasury portfolio was split into Treasury and Finance in December 1976, Lynch held both portfolios. He is noted for using the expression "rubbery" to describe some of the estimates in his 1977 Budget Speech, leading to the use of the expression "rubbery figures" in Australian political debate. He was forced to resign from the ministry on 19 November 1977 when it became known that he was using a family trust to minimise his tax obligations, which was perceived as a conflict of interest. He was replaced as Treasurer by John Howard and as Minister for Finance by Eric Robinson. An official inquiry found that he had done nothing illegal or improper, and he returned to the ministry in December, as Minister for Industry and Commerce. After the 1980 election, Fraser formed the Committee of Review of Government Functions, popularly known as the "Razor Gang", which Lynch chaired. Lynch was named a Knight Commander of the Order of St Michael and St George in the 1981 New Year Honours. He was also made a Privy Councillor in 1977, allowing him to use the pre-nominal letters The Right Honourable. He resigned his parliamentary seat on the grounds of ill-health in 1982, and died of stomach cancer in 1984. Sir Phillip's wife, Leah O'Toole, had been a boarder at St Ann's Ladies College, Warrnambool, after which she worked as an occupational therapist.