Thwaites entered Parliament at the 1992 election, as member for the inner city seat of Albert Park. Labor, having been in office for ten years, suffered a landslide defeat at the hands of the Liberal Party under Jeff Kennett. In the last three years of its term, Labor, under Joan Kirner, had presided over a sharp recession and a series of financial disasters including the forced sale of the State Bank of Victoria, and the collapse of Pyramid Building Society. Most commentators expected Labor to be in opposition for many years.