The Democratic Labor Party emerged from the split in the Australian Labor Party (ALP) in the 1950s. The DLP was created because of opposition to the perceived extent of communist influence in the union movement and on the defence and foreign policies of the ALP in the 1950s.

At Australian Labor Party (ALP) conferences in New South Wales (1945), Victoria (1946), South Australia (1946) and Queensland (1947) Industrial Groups were established to support ALP candidates running against Communists in union elections. The Industrial Groups worked closely with Catholic trade unionists through their organisation, the Catholic Social Studies Movement (the Movement), led by B A Santamaria, to fight communism.

In 1954 Dr H V Evatt, leader of the federal parliamentary Labor Party accused certain Labor members, particularly those based in Victoria, of being disloyal to the Labor movement and the Labor leadership, and also accused the Movement of being behind the group of dissidents. When divisions in the party culminated in the expulsion of the Industrial Groups at the Hobart ALP conference in 1955, supporters of the Industrial Groups formed the breakaway ALP (Anti-Communist)—an event known as ‘the Split’. The breakaway party was renamed the Democratic Labor Party in 1957.

The principal objective of the DLP was to keep the ALP out of office until the ALP faced up to the Communist threats that the DLP perceived existed in domestic and foreign affairs. The party also pursued Catholic social policies and opposed ‘permissiveness’. It has been asserted that under the intellectual guidance of B A Santamaria, the party strove to fight communist influence in trade unions and with the support of some sections of the Catholic Church, it battled against communism and the ALP.