The division is named after federation-era poet and author Banjo Paterson and was originally created in 1949 and abolished in 1984.

The division is centred on the lower Hunter Valley and the outer suburbs of Greater Newcastle.

It extended from the lower Hunter Valley in the south to the Manning River in the north, and the Great Dividing Range in the west.

At the 2007 election, Baldwin narrowly defeated new Labor candidate Jim Arneman, a Health Services Union organiser.

[3] Baldwin faced Arneman again in 2010 election and was reelected on a swing of four percent, garnering enough votes to win on the first count.

[6][7][8] However, the new map saw Paterson radically reconfigured into a more compact coastal-based seat in the lower Hunter, covering only 1,123 km2 (434 sq mi) – only one-sixth of its previous territory.

[10] ABC election analyst Antony Green wrote that even with the knife-edge notional Labor majority, the Liberals would have found it extremely difficult to hold the reconfigured Paterson.