Yes, there are other valid options beside the 2 major parties. Having them win individual seats in the lower house shows that the system works. But my argument was that it harms the major party they are most closest to at the macro level.

If there were 100 seats and 50 went to the libs, but labor and the greens split 30-20, the libs are (most likely) going to form government even though the people voting greens would prefer a labor government.

They get their local representative, but ultimately it means nothing, because the government that forms is on the political opposite of the spectrum. As pointed out in a sister comment though, this has only happened twice in our history, so I'm probably making a bigger deal than is appropriate.

Agree that the senate is going to be interesting though.

Yes that's a fair point.

But it's worth noting that the conservative side of politics in Australia has had this problem for a while, and has a perfectly workable solution.

The Liberal/National coalition has often held power, and yet Liberals & Nationals run against each other in elections.

There are similar examples in other countries too.

Coalitions are interesting because once the minor party has a role in government their views cannot be ignored so easily.

And I think the only sensible course of action is for the greens and labor to form a similar coalition, or have some kind of agreement that the greens will always support labor in a minority government.

The agreement that no minority government (by both the libs and labor) would be formed this election cycle could only of helped the liberals - not that they needed it.

I think this could be quite off-putting for some Labor voters and that the very loose alliance is best kept as an unspoken or informal one for that reason.

There is a very strong anti-Greens sentiment in places and Labor could not risk being entirely tarred with that brush.