Premier (1933–1938)
The newly united LCL went into the 1933 election as unbackable favourites following the self-destruction of the South Australian ALP over its handling of the Depression. Hill resigned nine months before the election and was succeeded by Robert Richards, who faced the nearly impossible task of holding on to power against the LCL. With the Labor vote split three ways—the official ALP, Premiers' Plan Labor, and Lang Labor—the LCL won a resounding victory, taking 29 seats against only 13 for the three competing Labor factions combined. In addition to becoming Premier, Butler served as his own Treasurer and Immigration Minister.
In Canberra, Butler achieved fame for his tough bargaining skills, which resulted in extra grants for South Australia; through this funding, and a reduction in government spending, South Australia was the first state since the start of the Depression to balance its budget. He was also known in Canberra as a fierce opponent of federal control, strongly opposing the proposed Commonwealth wheat pool and the rationalisation of butter production.
Butler's term in office also saw the founding of the South Australian Housing Trust, designed to build cheap homes for those affected by the Depression and the successful enticing of BHP to build the Whyalla Steelworks, and General Motors Holden to maintain its Adelaide base, as well as major changes to the structure of Parliament. The parliamentary term was expanded from three years to five years, and the House of Assembly was changed from a 46-member chamber elected from multi-member districts to a 39-member chamber elected from single-member districts. This had the effect of increasing the already significant rural overweighting that was written into the state constitution, which called for two rural seats for every one seat in Adelaide. The resulting malapportionment later became known as the Playmander.
Not all was rosy for Butler, though. The conditions laid down by the Country Party as part of agreeing to the merger left former Country Party politicians with more influence in the LCL than their numbers in parliament would have otherwise merited. Not only was Butler forced to give a ministerial post to Country Party power broker Percy Blesing, but former state Country Party leader Archie Cameron was handed the federal seat of Barker. Butler struggled to control rural members of the LCL - some of these members publicly disagreed with Butler over key issues. This internal opposition was magnified by Butler's refusal to introduce compulsory religious education into state schools or to ban drinking and gambling, which led church and temperance groups to launch a moral crusade against Butler, and which prompted conservative LCL members to consider dumping Butler as leader.
Despite this, Butler held on to his position and led the LCL to the 1938 election. The LCL lost several seats, but formed a minority government with the support of independents. Also at this election, the first with single-member district, he was elected for the seat of Light.