Assistant Minister to the Prime Minister Patrick Gorman says a fundamental shift is changing the way politics is done and "moving the mountains of public debate as we know it".
In response to One Nation's rise, he suggested the traditional divide in Australian politics has been supplanted by a split between populists and the practical.
"We each have a choice as to how we respond to these forces. Do we use them to build Australia up or do we use them to fight over the scraps left when politics lets people down?" he said in a speech to the McKell Institute on Tuesday.
The address comes as One Nation is riding high in a series of opinion polls, with the populist political party saying it has raised more than $4 million in donations in just under a week.
Leader Pauline Hanson says she will be launching an advertising blitz coinciding with State of Origin on Wednesday with money raised from the campaign
One Nation will spend around $300,000 running an ad on free-to-air TV before the game, ads during the match on streaming platforms and on mobile digital billboards outside the MCG.
The One Nation leader said she was "gobsmacked" by the level of support she'd received.
"(I) never thought we'd get anywhere near that money. We thought (it) might be by the end of the year, half a million or something like that," she told Sydney radio 2GB.
Senator Hanson said she would use the rest of the money to campaign against Labor ministers and Prime Minister Anthony Albanese.
"I want to get rid of Tony Burke, Chris Bowen and Clare O'Neil, (Andrew) Giles, all these people that have been incompetent, hopeless, bloody ministers that have actually made the country the state it is now," she said.
Recent polls have shown One Nation leading on primary votes, with the most recent Resolve survey showing Senator Hanson leading Anthony Albanese as preferred prime minister, 33 per cent to 29.
Senator Hanson said she was not being complacent about the rise in support, but indicated she would work with the coalition if it unseated Labor from government.
"I've offered supply and confidence to Angus Taylor to the coalition government so that we can get rid of this toxic Labor government. That's my main aim," she said.
Mr Gorman said Labor was the "only practical party of the centre" in Australia, in contrast to the coalition, Greens and One Nation which he claims have abandoned policy development in favour of populism.