By Tess Ikonomou in Canberra

The coalition says it is open to working with Pauline Hanson to oust Labor from power as the major parties blame migration and the economy for the rise of One Nation.

Recent polling has shown the anti-immigration party pulling ahead of Labor as the most popular party in the nation, while the coalition has sunk to a distant third in their standing with voters.

Pointing to economic issues as a factor behind the rise in populism, Prime Minister Anthony Albanese has also promised to reduce the nation’s migrant intake.

Frontbencher Murray Watt said the government was responding to the concerns of voters through measures in the May budget, such as tax reform.

“We know that there’s a lot of Australians doing it tough out there, and they’re sending a message to the major parties that they want us to do better, they want things to change,” he told Nine’s Today program on Tuesday.

Labor has launched a social media ad campaign asking its supporters to donate to the party to take on One Nation.

Opposition Leader Angus Taylor said the budget had further eroded trust in politics after Labor previously ruled out now-planned changes to investor tax incentives.

He said the coalition would work with others to defeat Labor at the next federal election and did not rule out a preference deal with One Nation.

“People are angry around Australia,” Mr Taylor told reporters in Sydney.

“They’ve had enough of this rotten Labor government that’s taking this country in the wrong direction.”

The government’s controversial changes to negative gearing and capital gains taxes are being opposed by the coalition.

The latest Newspoll, published in The Australian, showed a four-point rise in One Nation’s primary vote to 31 per cent, pulling ahead of Labor, which dipped one point to 30 per cent.

Support for the coalition further declined, dropping two points to 18 per cent.

Nationals leader Matt Canavan said people felt like they were going backwards economically.

“What these polls show is that people are very frustrated and angry about their elected representatives not listening to them,” he told Sky News.

“There are some very clear requests from people right now. People want migration to come down.

“They want … the government to focus on living costs, to focus on getting interest rates down and spending under control.”

Trade Minister Don Farrell said One Nation’s rise in support could be short lived.

“Populist parties in this country come and go. They rise and they fall. I don’t think Labor has anything to fear from One Nation,” he said.

“To the extent that anyone should be worried about One Nation, it should be the coalition.”