On 22 August 1929, Hughes and Edward Mann were expelled from the Nationalist Party for voting in favour of an unsuccessful censure motion against the government.

Tensions finally came to a head on 10 September, when Hughes successfully moved an amendment to the government's flagship Maritime Industries Bill.

[6] After the 1929 election, Hughes made unsuccessful attempts to rejoin both the Nationalists and the Labor Party, in the hopes that he could return as prime minister.

[8] The press regarded the Australian Party as a simply a vehicle for Hughes' ambitions; The Sun, a Sydney tabloid, was the only newspaper to give it favourable publicity.

[10] The first election the Australian Party contested was a by-election to the New South Wales Legislative Assembly in July 1930, in the Lane Cove constituency.

With Frederick Dunn (a former mayor of Lane Cove) as its candidate, the party polled 25.6% of the vote, putting it in third place behind Labor (30.7%) and the Nationalists (43.5%).

[14] The party secretary, W. F. Jackson, did likewise in August, personally attacking Hughes in an open letter to The Sydney Morning Herald.

Hughes and Walter Duncan, the Australian Party's sole remaining parliamentary members, joined the new UAP, as did Marks and Maxwell.

Hughes nonetheless denounced the Labor Party as controlled by communists, while simultaneously attacking the Nationalists as responsible for the Great Depression.

Other Australian Party policies reflected Hughes' pet interests, such as amending the constitution to increase the federal government's powers over commerce and industrial relations.