In seeking a second term at the election on August 22, Michael Gunner's government hopes to extend a period of Labor dominance that began with the watershed result of 2001, prior to which the Country Liberal Party had been in power without interruption since self-government was established in 1974. Labor has won four out of the five elections from that time, losing office for a term in 2012 before returning with a landslide win in 2016. The latter result reduced the Country Liberals to two seats in a chamber of 25, which raised doubts about its status as the official opposition when three members joined together in early 2020 under the umbrella of the Territory Alliance, led by former CLP Chief Minister Terry Mills. Labor won 18 seats at the 2016 election but has since lost two of them, with one member having joined the Territory Alliance and another become an independent.
The Legislative Assembly is composed of 25 small single-member divisions, with an average of 5649 voters each, including 13 in the Darwin/Palmerston area and 12 in the rest of the territory, five of which have majority indigenous populations. Typically of single-member electoral systems, the parliament tends to be dominated by the two major parties, although they accounted for less than three-quarters of the total vote in 2016. To this extent the Territory Alliance, which is contesting all but four seats, could potentially offer an unprecedented disturbance to the status quo. The Greens have never been represented, and typically only contest a limited number of seats at each election, while One Nation's only entry was when it contested five seats 2001. However, the small size of the electorates can allow independents, five of whom were elected in 2016, to entrench themselves once established.
During its previous time in government, Labor was led from August 2001 to November 2007 by Clare Martin, who led the party to a landslide re-election in June 2005, and then by Paul Henderson, who was returned with a narrow majority in August 2008 and defeated at the election of August 2012. The latter result was distinguished by an unexpected backlash against Labor in remote electorates, one of which had already been lost when Namatjira MP Alison Anderson quit the party and, after a period as an independent, joined the CLP. To this were added CLP wins with double-digit swings in the seats of Stuart and Arafura, and the defeat of Labor's Malarndirri McCarthy (now a Senator) in Arnhem after she had been returned unopposed in 2008. This enabled the CLP to secure a comfortable majority despite a largely status quo result in Darwin, where elections are usually won and lost.
The newly elected CLP government proved to be highly tumultuous and short-lived. Its leader, Terry Mills, was dumped just seven months after his election win, to be replaced by Adam Giles, the first indigenous Australian to serve as a head of government. Giles in turn was the subject of a farcical leadership challenge in February 2015, which he was able to thwart by threatening to lead his supporters across the floor to bring down the government. The situation was resolved by a deal in which his challenger, Katherine MP Willem Westra van Holthe, became Giles' deputy, despite having just accused him of lacking the “capacity, capability or the tenacity or the professionalism to be Chief Minister”. Five of the six CLP members elected in 2012 quit the party at various points during the term, including three of the indigenous MPs, who briefly joined the Palmer United Party, although one later rejoined the CLP.
The result of this disunity was a devastating defeat at the 2016 election that cost both the leader and deputy leader their seats, leaving only two CLP members standing, both in seats on the fringes of Darwin. Labor recovered all the bush seats it had lost, achieved a clean sweep of suburban Darwin, and for the first time won a seat in Alice Springs. In addition to three existing independents who held their seats, Terry Mills returned to parliament as an independent, having quit in early February 2014, while Labor deputy leader Lynne Walker lost the Top End seat of Nhulunbuy to another independent, Gingiya Mark Guyula.
The new Labor government has proved to be only moderately more stable than its predecessor, having lost three of the 18 MPs that were elected in 2016 following their expulsion from the caucus in December 2018 after they criticised the government's budgetary management. One of the three, Ken Vowles, quit parliament in January, resulting in a by-election in his Darwin seat of Johnston at which Labor's Joel Bowden only narrowly held off a candidate from the Territory Alliance. Another of the three, Jeff Collins, has joined the Territory Alliance and will run as its candidate in his Darwin seat of Fong Lim, while the third, Scott McConnell, will run as an independent in the Alice Springs seat of Braitling, seeking to move from his existing remote seat of Suart (now Gwoja). McConnell claimed in May 2019 that a move was afoot to have Gunner replaced as Labor leader by Drysdale MP Eva Lawler, though nothing became of it.
The two-member CLP was initially led by Daly MP Gary Higgins, but he handed the reins to Spillett MP Lia Finocchario when he announced his impending retirement in January. Terry Mills anticipated that he would be able to take over as the official Opposition Leader when Jeff Collins and Robyn Lambley joined him in the Territory Alliance in March, giving it three seats to the CLP's two. However, the government supported a motion from Finocchiaro to have the matter determined by parliament, which then voted five to three to maintain the CLP as the official opposition, with most or all Labor members abstaining and only the three Territory Alliance members voting in its favour.
The changes in the composition of parliament leave Labor in a position where it can lose no more than three of its existing seats without losing a majority, although it is presumably hopeful of recovering Fong Lim from Jeff Collins. Its position has been further weakened by a redistribution which, though generally limited in its effects, has caused the formerly remote electorate of Namatjira to absorb suburbs in largely conservative-voting in Alice Springs, turning it into a notionally CLP-held seat. However, the CLP's cause has been gravely hampered by the emergence of the Territory Alliance, which demonstrated its potency by outpolling it at the Johnston by-election. Given this development, Labor may regret its decision to abolish optional preferential voting, which the CLP introduced at the 2016 election, but for which much of the non-Labor vote could split between the two parties and exhaust during preference distributions.