Bicameralism. Constitutional Monarchy. Federalism.
Australia’s hybrid system of government contains a hodgepodge of influences derived from the systems of governance in the United Kingdom and the United States. A less formalised aspect of this legacy, however, is the dominance of two major political parties that invariably occupy the roles of government and opposition. We know this phenomenon as the “two-party system”.
In the United States, the Democratic and Republican Parties have enjoyed a duopoly on the Executive and Legislative Branches since the mid-1850s, whereas the United Kingdom’s Labour and Conservative Parties have alternated in government for over a century.
Australia’s electoral system and bicameral Parliament have, in recent history, steadily carved out space for minor parties to exert influence far beyond their numerical size. Two parties exemplify this phenomenon: Pauline Hanson’s One Nation (PHON) and the Australian Greens. While ideologically opposed, both reflect a fragmentation of the traditional two-party system and demonstrate how a parliamentary system designed for major party dominance can be leveraged by smaller players.
In their recent Budget Reply speeches, both parties also had the opportunity to present alternative economic policy visions to the Australian public.
Join Nexus APAC as we unpack One Nation’s burgeoning influence in Australian politics and the balance of power enjoyed by the Australian Greens in the Senate.
Pauline Hanson’s One Nation
PHON is a right-wing populist minor party founded in 1997 by Pauline Hanson, emerging directly from Hanson’s break with the Liberal Party and her election to Parliament as an independent. The party positions itself as an alternative to the major parties, drawing support from voters who feel underrepresented in mainstream political discourse.
Ideologically, One Nation blends economic and social conservatism with a strong populist critique of political institutions. Its platform has consistently emphasised reducing immigration, protecting domestic industries, and opposing what it characterises as “political correctness” and elite decision-making. At the same time, the party also advocates for targeted economic intervention in areas such as energy and taxation, policies to lower cost-of-living pressures, and increased national self-sufficiency.
PHON Budget Reply
One Nation’s recent Budget Reply speech captures a familiar populist critique of both the Government and the Opposition, combined with an attempt to position itself as an alternative economic voice. Senator Hanson spoke of One Nation’s fiscal strategy, warning of rising deficits, increasing interest payments, and stagnating productivity. Rather than operating solely as a protest party, One Nation used the speech to outline a policy agenda centred on cost-of-living relief, tax reform, enabling the resources industry, and supporting free enterprise.
Central to this platform is the proposal for income splitting, a policy designed to reshape the way Australian families are taxed. Under the proposal, couples with dependent children would be able to pool their incomes and divide them evenly for tax purposes, thereby reducing their total tax liability. In practical terms, this allows households to make fuller use of lower tax brackets, particularly where one parent earns significantly more than the other. One Nation argues that this reform would correct what it sees as a structural bias against single-income families, delivering “immediate and much-needed cost-of-living relief”.
However, One Nation’s capacity to translate policy into law remains limited. Unlike major parties, it lacks the numbers in the House of Representatives to shape government formation. Its influence instead lies in its ability to affect political narratives, pressuring the Coalition on issues like taxation and migration, and exploiting dissatisfaction with both major parties.
Australian Greens
By contrast, the Australian Greens represent a more institutionalised form of minor party power, particularly through their position in the Senate. Formed in 1992 from a collection of environmental and social justice movements, the Greens have evolved into the country’s primary progressive alternative. Their base of support has grown steadily in urban electorates, particularly among younger voters, positioning them as a consistent competitor to Labor on the left.
Furthermore, unlike One Nation’s newfound influence, the Greens have built durable parliamentary leverage, where proportional representation allows them to maintain a stable bloc of Senators. This was further demonstrated at the 2025 Federal Election, where they now hold the balance of power in the Senate, meaning government legislation requires support from either the Coalition or the Greens to pass.
Although the Greens’ House of Representatives vote reached its highest ever tally in absolute terms at the 2025 Federal Election, with 1,889,977 first preference votes, this did not translate into greater influence. Rather, the party lost three of its four seats in the House of Representatives, leaving it with one seat. As a result, while the party retains symbolic and strategic importance in the House of Representatives, its primary institutional leverage remains in the Senate, where its numbers translate more directly into legislative influence.
The Greens have signalled their intention to use this power to push for more ambitious reforms across climate, housing, and social policy. This was reflected in the passage of the Government’s environmental reform package in November 2025 with Greens’ support.
With a significant bloc of Senators, they can demand concessions in exchange for supporting government bills, shaping outcomes on issues ranging from emissions reduction to healthcare expansion. This makes them, in effect, a permanent negotiating partner for the government of the day.
Australian Greens Budget Reply
Greens Leader Senator Larissa Waters used her Budget Reply speech to highlight that Labor’s defence spending was looking after the “1%”, and that it was indicative of misplaced government priorities. She contrasted significant defence expenditure with cuts to social and economic supports. She criticised the allocation of “billions to buy additional weapons” and linked major spending commitments such as AUKUS to a failure to invest in public housing, rent support, household electrification, the climate transition and cost-of-living relief.
In her framing, defence spending was not treated as a neutral strategic necessity but as part of a broader pattern of government choices that favour corporations and entrenched interests over ordinary Australians. This critique positioned defence outlays as directly competing with social investment, reinforcing the Greens’ argument that fiscal resources should be redirected away from military capability and towards addressing issues such as inequality and the climate transition.
Conclusion
When Australians went to the polls in 1975, minor parties and independents attracted a combined 4% of the primary vote. Fifty years later, at the 2025 election, that share had grown to a record 34%.
Importantly, the Greens’ and One Nation’s influence reflects broader voter trends. A growing share of Australians are voting outside the major parties, with support for minor parties and independents reaching historically high levels. This erosion of the two-party vote has reshaped parliamentary dynamics, making crossbench negotiations a routine feature of governance rather than an exception.
Both parties point to the same underlying reality: the formal dominance of the two-party system no longer tells the full story of Australian politics. Whether through the populist challenge of One Nation or the legislative bargaining of the Greens, the centre of political gravity may be gradually shifting away from the binary contest between Labor and the Coalition, towards a more fragmented and negotiated form of governance.
