A year later, when tensions heightened between the LCL's conservative wing and the LM, it was established on its own as a progressive liberal party.

The balance of power was held by independent MP Ted Connelly, the mayor of Port Pirie.

Connelly sided with Dunstan and accepted his offer of Speaker of the South Australian House of Assembly.

Historically, the Legislative Council (the upper house) had been dominated by an LCL majority for decades due to the Playmander electoral malapportionment as well as the limit on upper house voting rights to the wealthier classes with suffrage dependent on certain property and wage requirements.

Following the close result of the election where Labor formed minority government, initial one vote one value electoral reform was enacted by Dunstan which would later be amended by future Labor premier John Bannon, after winning the 1989 election on 48.1 percent of the two-party vote.

It became the first and only state from 1989 to legislate the Electoral Commission of South Australia should redraw boundaries after each election with the objective that the party which receives over 50 percent of the statewide two-party vote at the forthcoming election should win the two-party vote in a majority of seats.