It eventually delivered him the prime ministership. And, although he won three general elections in a row, the dismissal of the Whitlam government that followed the budget impasse haunted Fraser for the rest of his life and overshadowed his political achievements.
During his prime ministership between 1975 and 1983, Fraser was considered patrician, aloof and arrogant, even by some of his supporters. Dubbed the "crazy grazier" by the media and an "Easter Island statue" by Labor opponent and future Labor prime minister Paul Keating, Fraser was a study in contradictions.
He was an economic conservative but a modest social reformer; a Cold War warrior and a fierce opponent of apartheid; a traditionalist with a social conscience he only gave full rein to in his later years.
Rising star
John Malcolm Fraser was born on 21 May 1930, the son of a wealthy Victorian political family. His early years were spent on Nareen Station, his family's pastoral property in western Victoria, followed by schooling at the prestigious Melbourne Grammar and then Oxford University.
He was elected to parliament in 1955 aged just 25, and the following year married Tamara Beggs, eldest daughter of another prominent farming family. By 1966 Fraser was minister for the army in Harold Holt's first government.
A rising star in conservative politics, he had a habit of over-reaching himself and setting a course not always in line with his party. But by 1975 he was opposition leader, confronting the radical and trouble-prone Whitlam government.
Titans of the Australian political scene in more ways than one - Fraser was just shy of Whitlam's 6ft 4in (1.93m) - the two men were key players in Australia's most controversial political moment: a constitutional crisis that led to Whitlam's dismissal by Australia's governor-general in November 1975.
As leader of the opposition Fraser blocked Whitlam's budget, forcing Governor-General Sir John Kerr to dismiss Whitlam as prime minister.
The country was shocked. Protest strikes and violent demonstrations followed.
In what became one of the most famous of Australian political speeches, from the steps of Parliament House in 1975, Whitlam said Fraser would "go down in Australian history from Remembrance Day 1975 as Kerr's cur".
But the Australian public wanted a steady hand after the rapid pace of Whitlam's reforms, and voted in Fraser's team in the largest win of any Australian federal election at that time.
In office, Fraser faced a post-war economic slowdown marred by stagflation, and the emergence of the so-called baby boomers who had more in common with Whitlam's progressive views on issues such as abortion, and who did not favour cuts to the public service.
Fraser focussed on trying to cut both government expenditure and taxation.
Away from the economic front, he increased the number of immigrants entering Australia, accepted Vietnamese refugees into the country - many of them arriving by boat - and promoted the concept of multiculturalism.
It was this last policy that years later, he maintained, was his government's finest legacy because of the way it helped build a cohesive community.
Refugee champion
Since the 1960s, governments had started to dismantle Australia's notorious White Australia Policy, which discriminated against non-European immigrants. Whitlam introduced legislation that allowed all migrants, regardless of origin, to be granted citizenship after three years of permanent residence.
However, the number and percentage of migrants from non-European countries didn't increase until after Fraser came to office. From 1975 to 1982, some 200,000 migrants arrived from Asia, including nearly 56,000 Vietnamese refugees.
Treatment of refugees was one of a number of issues in which Fraser clashed with his Liberal successor John Howard and others in the party. He criticised Howard's tough stance on asylum seekers and opposed Australia's involvement in the Iraq war.
Four months before his death, in a speech he gave at the opening of an asylum-seeker resource centre, Fraser said Australia's name had been damaged around the world because of the tough treatment meted out to asylum seekers by successive Australian governments.
"We are known as the most inhumane, the most uncaring, the most selfish of all the wealthy countries.  It used not to be that way," he said.
It was views such as these that made Fraser in his later years more popular with the left than the right side of politics. His departure from the conservative fold seemed complete when he resigned from the Liberal Party in 2010.
The reaction to his death by people who would once have been considered his political enemies showed how much Fraser and the public perception of him had changed over the years.
New South Wales Labor senator and outspoken union leader Doug Cameron said he was "devastated" that Australia had lost a great voice for human rights, while Leader of the Australian Greens Christine Milne said one of Fraser's hallmarks was his "compassion and dedication to building a thriving and peaceful multicultural society".
Malcolm Fraser's decision in 1975 to block Australian Prime Minister Gough Whitlam's budget was the ultimate in brinkmanship.