Australian elections use two methods to count votes. Preferential voting is used to elect members of the House of Representatives (Lower House) and a proportional representation system is used to elect members of the Senate (Upper House).
So what’s the difference?
In order to win a seat in the House of Representatives, a candidate is required to win an absolute majority (more than 50%) of the votes cast in an electorate.
If after everyone’s first preference votes are counted and no candidate has more than 50% of the votes the candidate with the least votes is excluded and their ballots are distributed to their second choice. If there is still no winner this process is repeated until a candidate has over 50% of the votes.
That’s why we number every candidate on the green ballot, if your first choice doesn’t get enough votes then your vote goes to your next choice. For more info on this process see here.
It’s a little more complicated in the Senate, where candidate is required to obtain a ‘quota’ or minimum number of votes to win a seat. This process takes a lot longer than the lower house count, only counting of first preferences can happen on election night as the final Senate results cannot be calculated until the state or territory-wide total of all votes is known and is used to determine the quota. For more info on this process see here.
The below video explains this process in more detail but note that it is specific to SA state elections.