The Proportional Representation system described is in use for our Upper Houses of Parliament. The gratuity I mentioned is for the Lower Houses where it is one elected representative per electorate.

However, where I believe ours differs from the US system is that a winning candidate must have 50%+1 votes. If there aren't enough on primary couting, then the votes for the lowest polling candidate are re-distributed according to the "2" preferences. This continues recursively until there is a winner. If someone has only voted "1" and not listed any preferences, then the party that they voted for supplies a list of preferences as a "default". Thus, preference deals with and by the minor parties have become A Big Thing.

Wade.