Early in 1914 the outbreak of the Great War seemed to promise a surge in Labor's fortunes. Most Labor spokesmen were committed to pursuing the war with a complete mobilisation of national effort. The election of the third Fisher Government in September 1914 was followed by Labor victories in South Australia and Queensland in 1915, while Labor Governments continued in New South Wales and Western Australia. However, the war also brought serious problems for the unity of the labour movement. Most significant was the fact that the war signalled the end to significant reform by all these governments. A political truce between Labor and Liberal put virtually all implementation of the Labor Platform on hold, to the great frustration of large sections of the trade union movement. Another unsettling factor was vocal opposition to the war from a section of the labour movement.
In October 1915 Andrew Fisher, physically unwell and dispirited by the intensity of the political effort demanded of him, stepped down as Prime Minister. He was replaced by William Morris (Billy) Hughes, who had been Attorney-General in Fisher's administration. Hughes was talented, effective in debate, and a man very sure of his own political opinions. He also found it easier to make enemies than friends. Like most of the political leaders in Australia at the time he regarded the war as a test of survival for the British Empire, to which Australia was completely loyal. Hughes devoted himself to restructuring the various commodity industries (strategic metals, beef, wool, sugar, etc.) that were central to the war effort. Also, again like most Australian leaders, he worked tirelessly to encourage voluntary recruitment of soldiers to be sent off to fight on the other side of the world. The response from Australia's youth was impressive, with over 200,000 young men volunteering in the first year of the war, with continuing strong enlistment in 1915 and 1916.
The Federal Labor Party had survived quite well since its beginning with only Caucus and the triennial Conference as its federal organisation. Suggestions to establish a Federal Executive had been postponed due to State rivalries and disagreements about how it should be constituted. Eventually, at the 1915 Conference, agreement was reached that the Federal Executive should be a body comprising two members elected from each of the six State branches of the ALP. A quorum of seven members ensured that at least four States would always be represented. The first meeting of the Federal Executive was held in June 1915, and normally met in Melbourne as long as that city was the seat of Parliament. The federal nature of the Labor Party that the national party was ultimately subservient to the State branches was asserted at this point.