Hawke's government was in political trouble, with high interest rates and a financial crisis in Victoria.

Though Labor had to contend with the late 80s/early 90s recession, they won a record fourth successive election and a record 10 years in government with Bob Hawke as leader, a level of political success not previously seen by federal Labor.

[6] However, it only managed a two-party swing of 0.9 percent, which was not nearly enough to deliver the additional seven seats the Coalition needed to make Peacock Prime Minister.

This election saw the peak of the Australian Democrats' popularity under Janine Haines, and a WA Greens candidate won a seat in the Australian Senate for the first time – although the successful candidate, Jo Vallentine, was already a two-term senator, having previously won a seat for the Nuclear Disarmament Party at the 1984 election, and the Vallentine Peace Group at the 1987 election.

Newell benefited from the presence of independent and anti-nuclear activist Helen Caldicott.