While also true in Australia, we have preferential voting as well and whilst smaller parties dont have the numbers or votes to become the ruling parties you can vote 1 for a smaller party and 2 for a major party so the smaller party gets a funding boost for future campaigns.
And also if enough people vote for a smaller party them a larger party may have to team up with a smaller party to get the majority numbers to hold government.
Then the smaller party may have a bit of clout to get some of their values and opinions into parlimertary debate or passing bills meaning we get a wider variety of input than the major party line and its members falling into line to vote with their peers blindly.