The election was held following the early dissolution of the House of Representatives. The Prime Minister of Australia, Robert Menzies, gave as his reason for calling an election within two years that there was an insufficient working majority in the House. The 1961 election had been won with a substantially reduced majority of only two seats. One of the consequences of an early House election was that there were separate Senate and House elections until 1974. This became a factor in the Gair Affair. The Coalition government of the Liberal Party led by Robert Menzies and the Country Party led by John McEwen was returned with a substantially increased majority over the Australian Labor Party led by Arthur Calwell. Indigenous Australians could vote in federal elections on the same basis as other electors for the first time in this election following an amendment to the Commonwealth Electoral Act becoming law on 1 November. The amendment enfranchised Indigenous people in Western Australia, Queensland and the Northern Territory. Indigenous voting rights in other states had been in place since 1949.
The election was notable for the issue of state aid to non-government schools being finally resolved. There was a school strike in Goulburn, New South Wales in 1962. Health officials had requested the installation of three extra toilets at a Catholic primary school. The Catholic Church declared it had no money to install the extra toilets. The archdiocese closed down its schools and sent the children to government schools. Nearly 1,000 children turned up to be enrolled locally and the state schools were unable to accommodate them. The strike received national attention. The Labor premier of New South Wales, Robert Heffron, had promised money for science labs at non-government schools. This policy was overturned by a meeting of the Labor Party's federal executive. Under ALP rules the federal executive had responsibility for party policy when the party's national conference was out of session. Menzies called a snap election with state aid for science blocks and Commonwealth scholarships for students at both government and non-government schools as part of his party's platform. This tended to woo Catholic voters away from the Labor Party which they traditionally supported; the wedge driven between the ALP and its Catholic constituency took nearly a decade to overcome. Most non-government schools were Catholic. The Labor Party suffered a first-preference swing of −2.43% and the loss of ten seats. The Country Party vote was higher than the Democratic Labor Party vote for the first time since 1955; the DLP had evolved from the Catholic wing of the ALP. The Liberal Party was, however, not dependent on the state-aid issue to win the election; other issues, such as the "36 faceless men" gibe, also did damage to the ALP.
Other key issues in the election included the proposal by the United States to build the North-west Cape communications facility which would support the US nuclear submarine capability. A special federal conference of the ALP was called in March 1963 which, by a narrow margin, supported the base. The Left faction was opposed to a foreign base on Australian soil, especially one which supported America's nuclear weapons capability.
"36 faceless men"
During the ALP Federal Conference in March 1963, journalist Alan Reid commissioned a photograph of Arthur Calwell and Gough Whitlam standing outside the conference venue at Kingston, a suburb of Canberra. Although Calwell was the Leader of the Opposition in the House of Representatives and Whitlam was his deputy, neither man was eligible to attend the conference, which consisted of six members elected by each state ALP branch. Reid jibed that the ALP was ruled by "36 faceless men" – an accusation that was picked up by Menzies and the Liberal Party in its election propaganda, and is still remembered more than 40 years later.
The week before the election, on 22 November 1963, John F. Kennedy, the President of the United States, was assassinated. Alister McMullin, President of the Senate, represented Australia at the funeral in Washington. It has been suggested that this tragedy helped to consolidate Menzies' position.
