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Labor is the largest single party in the Lower House. The Liberal Party has (almost) never gained a true majority. The National Party, with whom the Liberal Party coalesces (known in Australia as The Coalition or the LNP) is our current major opposition, and they only hold that position as a coalition. The Greens regularly poll between 9-12%, which causes our Federal Senate to end up giving them a significant amount of power. We also (thanks to changes a recent government made) have a significant crossbench made up of The Greens, minor parties and independents. Our current senate (and most previous Senates) has many potential ‘kingmakers’ (including previous AFL legend David Pocock, Jacqui Lambie and others) which mean that governments can’t pass legislation without courting those outside their party.
To the outsider it may seem that we only have two parties, but in our context we understand it to be more complex than that. Many Australian jurisdictions have known minority-government, government-by-coalition and Lower House government tempered by Upper House diversity which tempers the passage of legislation.
Like I said, it’s not a perfect system (and pretty far from direct democracy) but we sit in this interesting position between the absolute Two-Party System of FPTP jurisdictions and other systems that produce 5+ parties that need to form government together. Our system is far from perfect, but it’s not terrible.