 Independent of the LM, the LCL had begun to change. It eventually supported Don Dunstan's bills for electoral reform, both to the House of Assembly and the Legislative Council, and its internal structure was reorganised and modernised, particular with the arrival of Tonkin, its first urban leader. The LCL renamed itself the South Australian Division of the Liberal Party of Australia to bring itself into line with its federal counterpart. Thus, many of the reasons for the LM's split had become null. Combined with the LM's declining membership (one third of members had not renewed) and its large debt, it found itself in a precarious position. Negotiations in 1976 began with the aim for the LM to merge into the new Liberal Party, and news of the secret talks were leaked in April. Once the news became public, Millhouse stated his complete opposition: "I will not rejoin the Liberal Party ... I have meant what I said in the past and I do not see any change in the attitude of the Liberal Party to alter my view." He said doing so would entail a surrender of honour and self-respect, and described the LM as the only "genuine Liberal party" in the nation, boldly predicting that its agenda would become dominant in society. Millhouse's stand was widely condemned by the media, who saw it as based on pride rather than pragmatism, and unhelpful for anti-Labor politics. Hall, however, wanted to unite the non-Labor forces, and acknowledged that "there is no prospect of maintaining LM electorate groups ... in simple terms, our alternatives are to swallow some little pride, and unite to fight Labor." He said to do otherwise would be to "exist in splendid selfish isolation", and said they could not survive as a relevant force by holding Goyder and Mitcham and losing upper house seats owing to a dwindling vote. Hall said the LM's reform agenda had been fulfilled, their finances were untenable and contended there was no ideological reason remaining for a split. This put him at increasing odds with Millhouse, who continued to describe the Liberals as "very conservative". Some members of the Liberals were also wary of a merger, owing to the long-standing antipathy between the two groups, and persistent criticism of them from the LM over the years.
