O'Grady initially considered running for preselection as the Labor candidate in the Legislative Assembly seat of Bligh against independent MP Clover Moore, for the March 1995 state election. However he later withdrew in favour of former Sydney Gay and Lesbian Mardi Gras president, Susan Harben, who was nevertheless defeated by Moore at the election. On 30 May 1995 O'Grady was given leave by the Labor Party to introduce a private member's bill into the council to provide for 'regulation to protect medical practitioners who assist the terminally ill to end their lives', which would make such a bill the first time a bill concerning euthanasia would be considered by the Parliament. He had not done so, however, at the time of his resignation. Although elected for a second eight-year term at the March 1995 state election, O'Grady resigned due to health concerns on 3 January 1996 and the vacancy he created was filled by Peter Primrose. Six months after his resignation from parliament in July 1996, after various circulating rumours, O'Grady announced on television that he had AIDS. He made his announcement on the current affairs programme "Witness", hosted by Jana Wendt, stating: "I’m 35. I resigned from parliament in January. My parliamentary career is behind me. I have AIDS. It is progressing. I will fight on. Mind over matter." He also noted that despite concerns over the personal nature of his admission, he made it as "the discrimination against HIV is something which needs to be dealt with out there in the public arena". His admission was met with overwhelming support including the Labor Premier Bob Carr, who said: "Having a politician say, 'This is my life, HIV and Aids', is a reminder to everyone that a lot more of this is going to happen in our society." For his part, O'Grady noted that he thought more about his partner, Murray Ward, than his diagnosis: "I get more maudlin about Murray than I do about me. It crippled me. And in a sense I have probably missed him more in the past six months, because we did have plans post-parliament, and he's not around to participate". Later life A few years later, with health significantly improved, O'Grady returned to work as a staffer for the ALP, including as Chief of Staff to the Minister for Tourism and Sport and Recreation in the Carr and Iemma governments, Sandra Nori from