Due to the party's numbers in the Senate, both Liberal and Labor governments required the assistance of the Democrats to pass contentious legislation.

[7] The party's broad aim was to achieve a balance of power in one or more parliaments and to exercise it responsibly in line with policies determined by membership.

In 1982, Millhouse resigned to take up a senior judicial appointment, and Heather Southcott won the by-election for the Democrats, but lost the seat to the Liberals later that year at the 1982 state election.

Six-year terms were won by Paul McLean (NSW) and incumbents Janine Haines (South Australia) and Janet Powell (Victoria).

1990 saw the voluntary departure from the Senate of Janine Haines (a step with which not all Democrats agreed) and the failure of her strategic goal of winning the House of Representatives seat of Kingston.

The casual vacancy was filled by Meg Lees several months before the election of Cheryl Kernot in place of retired deputy leader Michael Macklin.

Despite the loss of Haines and the WA Senate seat (through an inconsistent national preference agreement with the ALP), the 1990 federal election heralded something of a rebirth for the party, with a dramatic rise in primary vote.

This was at the same time as an economic recession was building, and events such as the Gulf War in Kuwait were beginning to shepherd issues of globalisation and transnational trade on to national government agendas.

Before 12 months of her leadership had passed, the South Australian and Queensland divisions were circulating the party's first-ever petition to criticise and oust the parliamentary leader.

The explicit grounds related to Powell's alleged responsibility for poor AD ratings in Gallup and other media surveys of potential voting support.

When this charge was deemed insufficient, interested party officers and senators reinforced it with negative media 'leaks' concerning her openly established relationship with Sid Spindler[21] and exposure of administrative failings resulting in excessive overtime to a staff member.

One major collateral casualty was the party whip Paul McLean who resigned and quit the Senate in disgust at what he perceived as in-fighting between close friends.

Since the Democrats now shared the parliamentary balance of power with two Independent senators, the Coalition government was able on occasion to pass legislation by negotiating with Colston and Brian Harradine.

Under Lees' leadership, in the 1998 federal election, the Democrats' candidate John Schumann came within 2 per cent of taking Liberal Foreign Minister Alexander Downer's seat of Mayo in the Adelaide Hills under Australia's preferential voting system.

Internal conflict and leadership tensions from 2000 to 2002, blamed on the party's support for the Government's Goods and Services Tax, was damaging to the Democrats.

Opposed by the Labor Party, the Australian Greens and independent Senator Harradine, the tax required Democrat support to pass.

On 6 December 2003, Bartlett stepped aside temporarily as leader of the party, after an incident in which he swore at Liberal Senator Jeannie Ferris on the floor of Parliament while intoxicated.

Following internal conflict over the goods and services tax and resultant leadership changes, a dramatic decline occurred in the Democrats' membership and voting support in all states.

The trend was noted that year by political scientists Dean Jaensch et al.[36] Support for the Australian Democrats fell significantly at the 2004 federal election in which they achieved only 2.4 per cent of the national vote.

"[37] In November 2006, the Australian Democrats fared very poorly in the Victorian state election, receiving a Legislative Council vote tally of only 0.83%,[38] less than half of the party's result in 2002 (1.79 per cent).

[43][44][45] In the New South Wales state election of March 2007, the Australian Democrats lost their last remaining NSW Upper House representative, Arthur Chesterfield-Evans.

In November 2018 there was a report that CountryMinded, a de-registered microparty, would merge with the Australian Democrats in a new bid to seek membership growth, electoral re-registration and financial support.

"[58]: p187  From the outset, members' participation was fiercely protected in national and divisional constitutions prescribing internal elections, regular meeting protocols, annual conferences—and monthly journals for open discussion and balloting.

Policies determined by the unique participatory method promoted environmental awareness and sustainability, opposition to the primacy of economic rationalism (Australian neoliberalism), preventative approaches to human health and welfare, animal rights, rejection of nuclear technology and weapons.

"[7] In particular, leader Don Chipp, and Tasmanian state Democrat Norm Sanders, played crucial legislative roles in preventing the damming of the Franklin River.

[c] This problem was to torment later leaders and strategists who, by 1991, were proclaiming "the electoral objective" as a higher priority than the rigorous participatory democracy espoused by the party's founders.