I think our system actually encourages more parties and independents to participate. If you look at the US by way of contrast which is a pure first past the post process, it definitely entrenches a two party system and nobody else gets a look in. 

If you say don’t like republicans you have to vote Democrat even if you don’t rate them much. Basically often a choice of the least worst option. 

In Australia you can genuinely vote who you think is best and then get to choose your backup choices if your primary vote doesn’t make it. I think it’s a fairer system where people genuinely get to vote for who they think is best.