Malcolm Fraser had been commissioned as caretaker prime minister following the dismissal of Gough Whitlam's three-year-old Labor government by Governor-General Sir John Kerr, on 11 November 1975.

The same day, Fraser advised an immediate double dissolution, in accordance with Kerr's stipulated conditions (see 1975 Australian constitutional crisis).

Labor suffered a 30-seat swing and saw its lower house caucus cut almost in half, to 36 seats—fewer than it had when Whitlam became leader in the aftermath of the Coalition landslide nearly 10 years earlier, in the 1966 election.

The election followed the dismissal of the Whitlam government by Governor-General Sir John Kerr in the 1975 constitutional crisis.

However, the Coalition focused on economic issues following the 1973 oil crisis and 1973–75 recession, the Loans Affair, alleged Labor mismanagement of inflation, and campaigned under the slogan "Turn on the lights, Australia" (drawing on a contemporary cynicism: "Would the last businessman leaving Australia please turn out the lights?").