When the South Australian Labor Party leader, Mike Rann, clinched a deal with the maverick former Liberal MP Peter Lewis five days after the state election of 9 February 2002, Labor was now occupying the Treasury benches in every state and territory in Australia. Rann's victory came only three months after John Howard had led the federal Liberals to their third successive victory. This is the paradox.

In the past twenty years we have nearly been there before, but never like this. In 1991 the only conservative leaders in government in Australia were Nick Greiner in New South Wales and Marshall Perron in the Northern Territory, but by 1994 only Queensland Premier Wayne Goss was able to fly the Labor flag at premiers' conferences.

But Labor's current dominance of state politics was further cemented when Victorian Premier Steve Bracks wiped out his Liberal opponents in November 2002. Bracks – the unlikely winner of three years earlier, when he snatched a remarkable victory from the hitherto rampant Jeff Kennett – humiliated the Liberals, who saw the number of their Lower House seats drop from thirty-six to seventeen in 2002. Remarkably this was a much worse result than Labor wore in 1992, when it was severely punished by voters for its perceived gross economic mismanagement that saw the state wallowing in record debt. In that election Labor still retained twenty-seven seats.