It should be pointed out that due to the way Australia's preferential voting system works [1] candidates that don't actually stand a chance of winning have a lot of power at election time.
When voting, all candidates are numbered in order of your preference. If your first candidate doesn't secure a majority of votes, their votes are removed, and then allocated to the voters second preference and so on, until a winner is found.
Candidates also hand out 'how to vote' cards [2] that show how the candidate suggests you allocate your preferences.
If a smaller candidate or party is getting decent support before the election, the other parties will then try to make deals with that candidate to secure their second preferences.
Preference deals only really matter in marginal electorates in close elections.
In Australia seats are laid out by a politically neutral Electoral Commission. There's no gerrymandering, so seats can and do have a varying distribution of "safeness" for each of the major parties.
In a safe seat, the necessity for preference deals is greatly diminished.
Only in marginal seats do preference deals count, and only when the nationwide margin of preference is sufficiently close that a few seats will decide the election.
The upcoming election is absolutely not shaping up that way. On current figures, the Labor Party are going to be thumped very hard; potentially the worst drubbing in Federal election history. The Liberal-National coalition have somewhere between zero and zilch requirement to kiss up to minor and microparties.
That's a strength of preferential voting, but you make it sound like a negative somehow. It means you can vote for who you like, and your hand is not forced by 'but they'll never get in', as seen with the Lib Dems in the UK.
In the senate it's not the case since each state currently elects twelve senators each, and each territory two.
Since there are a greater number of people being elected from the same pool, it's more likely that a minor party candidate will be elected to the senate.
On the other hand, in the house of representatives you're most likely going to get a candidate from one of the major parties since most people preference them first.
When voting, all candidates are numbered in order of your preference. If your first candidate doesn't secure a majority of votes, their votes are removed, and then allocated to the voters second preference and so on, until a winner is found.
Candidates also hand out 'how to vote' cards [2] that show how the candidate suggests you allocate your preferences.
If a smaller candidate or party is getting decent support before the election, the other parties will then try to make deals with that candidate to secure their second preferences.
[1] http://en.wikipedia.org/wiki/Electoral_system_of_Australia#P...
[2] http://www.prsa.org.au/htv_cards.htm