The government's plans to raise taxes on investments including housing, shares and companies prompted fierce backlash from the business community, in particular from startups who feared they would be disproportionately impacted.
But One Nation Senator Sean Bell claimed his party's surging popularity also played a role.
"One Nation's campaign to 'fire the liar' rattled them, they realise they're exposed, and that is what has driven them into this hugely embarrassing backflip," he told Sky News on Friday.
Presser on what the right-wing party would do differently, Senator Bell said One Nation had proposed allowing couples to split their income for tax purposes, but insisted the focus should be on the government's "deeply flawed budget".
"This government has put a terrible bill, a terrible budget before parliament. Our entire focus (is that) it is defeated," he said.
Recent polls show One Nation is the most popular political party in Australia while its leader Pauline Hanson leads Anthony Albanese as preferred prime minister.
Some Labor operatives believe the minor party's rapidly changing fortunes are simply a flash in the pan and argue voters will shift their allegiances back to the government and opposition at the next election.
But in a speech on Wednesday, Senator Hanson insisted One Nation was here to stay and criticised sections of the media which had downplayed her rise.
A protest banner which unfurled during the address on Wednesday was installed the day before by two men with ladder in a matter of minutes, club president and Sky News presenter Tom Connell also revealed.
Federal police are now investigating the incident, which interrupted Senator Hanson's speech.
The probe comes as Treasurer Jim Chalmers launched a fresh attack on One Nation on Friday, taking aim at the party's financial ties to mining billionaire Gina Rinehart.
"The absurd irony of their position is that they want to change the government in order to leave everything the same: leave the housing market the same, leave the tax system the same," he told ABC Radio National.
"I think what that exposes is a One Nation party which will always do whatever Gina Rinehart tells them to do, but never do what the workers and battlers of this country need them to do," Dr Chalmers said.
