The Liberal–National Coalition government of Premier Nick Greiner, which enjoyed a considerable majority following their landslide win at the 1988 election, was seeking a second term in office against new Labor Opposition Leader Bob Carr.

The 1988 election generated a two-party preferred swing to the Coalition of 8.4% and saw the Labor Party record its lowest primary vote in half a century.

Qualms about the meaning of its mandate were clearly of little concern to the new government, under Nick Greiner which immediately began introducing wide-ranging reforms to the New South Wales public sector.

The finance and administration of all government trading enterprises was put on a more commercial basis, with standard rates of return on capital set and separate community service obligations for specific public funding identified.

The government implemented “truth in sentencing” laws which required judges to set minimum terms for convicted criminals and abolished time off for good behaviour in gaol.

Labor made important gains at the March 1990 federal election, but the electoral position had been reversed by the end of the year.

The economic recession of the early-1990s hit the State's finances, but New South Wales was substantially better off than interstate Labor administrations that had accumulated debt and gambled on failed commercial ventures.

The hard medicine introduced by the Greiner Government was unpopular, but it was becoming apparent that New South Wales was in a better position as a result of the financial changes.

The surprise resignation of Metherell over tax charges in July 1990 provided a boost for the government by removing its most controversial Minister.

The Coalition had promised to cut the size of the Legislative Assembly from 109 to 99 seats, reversing the previous government's increase and automatically triggering a redistribution.

Hailstones the size of cricket balls and in some case larger pummeled vehicles and punctured holes in house roofs across many suburbs particularly Liverpool, Bankstown, Bass Hill, Auburn and Lidcombe.

Labor-held seats in particular had high informal votes, with 23.48% in Bankstown, 17.80% in Cabramatta, 15.29% in Canterbury, 19.13% in Fairfield, 16.03% in Heffron, 15.82% in Lakemba, 22.24% in Londonderry, 16.07% in Smithfield and 8.26% in The Entrance.

They were joined by former National Party member Tony Windsor in Tamworth and local councillor Dr Peter Macdonald in Manly.

Most importantly, the agreement introduced fixed four-year parliamentary terms, a provision entrenched in the Constitution with 76% support at a referendum called in conjunction with the 1995 election.