SYDNEY, May 10, 2026 (BSS/AFP) - Australia's leading opposition Liberal Party may have to work with a far-right, anti-Islamic party that defeated it in a "bloodbath" by-election, a senior government minister said Sunday.

One Nation, whose leader Pauline Hanson wants to slash immigration and has repeatedly made anti-Islamic remarks, won its first lower house federal election battle on Saturday.

"We are coming after those other seats," Hanson vowed after the win. "You are not going to be the forgotten people any more."

One Nation's David Farley took 39 percent of the vote in the rural New South Wales seat of Farrer, snatching the seat at a time of rising prices, unaffordable housing and concern over issues like immigration.

His nearest rival, an independent candidate, secured 28 percent of the vote while the conservative Liberal Party's contender got 12 percent, and the rural-based National Party 10 percent, official results showed.

"This wasn't a by-election -- it was a bloodbath for the coalition," Treasurer Jim Chalmers told Sky News Australia, referring to a Liberal-National party alliance that has governed Australia for much of the postwar period.

"What it shows is that the coalition can't beat One Nation. They'll have to join them. There's no future coalition government, I think, without One Nation in it," Chalmers said.

Until the weekend, traditional conservative Liberal and National parties had held the seat of Farrer since 1949.

Senior Liberal Party lawmaker Tim Wilson refused to rule out forming a minority government with One Nation's support in the future.

"My objective is make sure that the Liberal Party is in a position to govern as strongly as possible," he said when pressed on the possibility in an interview with national broadcaster ABC.

"Of course, we traditionally form a coalition with the National Party. But it is up to the Australian people to decide who they want to vote for."

He stressed, however, that he wanted his party to defeat One Nation candidates in any election.

- 'Take our medicine' -

Deputy Liberal Party leader Jane Hume would not be drawn on the question of an alliance with One Nation, telling an interviewer that her party's long-standing coalition with the National Party had served the country well.

"Talking about coalitions is very premature and probably irrelevant right now," she said.

Australian Prime Minister Anthony Albanese's centre-left Labor Party did not contest the by-election, which it considered unwinnable.

The next general elections are expected to be held by May 2028, and the Labor Party has a significant lead in the opinion polls.

The Farrer by-election was triggered when former Liberal Party leader Sussan Ley -- who held it for 25 years -- resigned in February after being toppled as her party slumped in opinion polls behind One Nation.

The Liberal Party under new leader Angus Taylor is still battling for second place with One Nation, which has surged in the polls since mid-2025 but has few parliamentary seats.

One Nation holds four senate seats and two in the lower house following the Farrer by-election victory, including one gained by a high-profile defection from the National Party.

Speaking after his party's defeat on Saturday, the Liberal Party leader called for cuts to immigration and attacked the country's target of achieving net zero carbon emissions -- similar lines to One Nation's.

"We need to take our medicine," Taylor said.