Following the 1966 election deputy leader Eric Lloyd became the subject of attacks from the extra-parliamentary wing of the Labor party, as well as within the caucus.

As a result, party leader Jack Duggan supported Houston in challenging Lloyd which he did successfully by 15 votes to 10.

Three months later on 11 October 1966 Duggan abruptly resigned as leader due to a "taxation difficulty of some magnitude".

[2] After failing to make significant inroads into the coalition's majority at either the 1969 or 1972 elections there were reports that Houston would be leaving the leadership either through appointment to the Qantas board or as High Commissioner to New Zealand, however these never came to pass.

Ultimately his deputy Perc Tucker organised a vote of no confidence in his leadership following the poor result in the federal election which was carried by 17 votes to 15, with Tucker defeating Houston by the same margin.