It traces back to the economic liberalism of some of its founding parties like the Free Trade Party. The original Commonwealth Liberal Party (predecessor to the UAP) was a lot more socially liberal as well.
Social conservatism became more and more prominent as differing groups gravitated towards them as a counterbalance to the strong ALP, and Menzies' rallying of conservative forces during the war made it dominant. The socially liberal wing was further eroded as the Nationals rose to prominence, and wasn't helped by things like Don Chipp taking a fair chunk of the moderates with him when he formed the Democrats.
Even so, the party has become a lot more conservative in the last 30 years. Even the Fraser government was quite socially liberal compared to Howard's - it's just that in retrospect the flagrant socialism of Whitlam made him look positively right wing.
I hope for a bit of a backlash at some stage. One of the attractive things about the Liberal Party has always been its status as a broad church, and I would rather it didn't lose that and permanently become a pure conservative party.