The Single Transferable Vote (STV) system used in Australian Senate elections aims to achieve proportional representation, but it can still have some issues and limitations:

1. Preference deals and group voting tickets: When voting 'above the line', voters can assign their preferences to parties or groups, who then determine the order in which candidates receive these preferences through group voting tickets. This can lead to preference deals between parties, which may not accurately reflect the voters' intentions. However, the 2016 reforms to the Australian Senate voting system have made it harder for minor parties to "game" the system through these deals.

2. Exhausted votes: In the vote counting and preference distribution process, a ballot can become "exhausted" if all the candidates a voter ranked have been either elected or eliminated, and the voter has not ranked any other candidates. Exhausted votes do not contribute to the election of any further candidates, potentially leading to some votes not being reflected in the final results.

3. Micro-party candidates and "preference harvesting": In some cases, micro-parties with a low primary vote can win Senate seats by benefiting from preference deals or preference harvesting, which can result in candidates being elected with a small percentage of first preference votes. This can be seen as a distortion of the voters' will, as it may not truly represent the popularity of the candidate.

4. Complexity and voter understanding: The STV system can be complex for voters, particularly when it comes to preference distribution and the effect of ranking candidates 'above the line' or 'below the line'. This complexity may lead to some voters unintentionally ranking candidates or parties that they do not truly support.

5. Underrepresentation of territories: The Australian Capital Territory (ACT) and the Northern Territory have fewer senators than the six states, leading to a potential underrepresentation of these territories in the Senate.

Despite these issues, the STV system in Australia provides a relatively fair representation of the voters' preferences. The system aims to ensure that the Senate composition reflects the diversity of political views in the country, and the 2016 reforms have helped to address some of the system's shortcomings.
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