He was the Nationals member of the Victorian Legislative Council representing North Eastern Province from June 1978 until November 2006 (excepting a four-month break in 1984–85).
At the 1969 federal election, he was campaign director in Deputy Prime Minister Sir John McEwen's seat of Murray.
In the same year, he stood as the National Party candidate for the relatively safe Legislative Assembly seat of Murray Valley, replacing the retiring member George Moss.
In the lead-up to the 1976 state election, the Murray Valley electorate underwent major boundary changes, and as a result, Baxter chose to contest the adjacent seat of Benambra.
In 1984, Baxter resigned from the Legislative Council to contest the federal seat of Indi, challenging sitting Liberal member Ewen Cameron.
Baxter retained his previous portfolios after being re-elected in 1985, and received another promotion in 1988, when he became Leader of the National Party in the Legislative Council.
This meant that a range of new portfolios had to be filled, in order to cover all the areas that had previously been overseen by members of the larger Liberal Party.
Baxter was an active member of the Commonwealth Parliamentary Association for many years, having served on its executive committee and attended numerous conferences, going back as far as 1980.