In a rare public display of personal opinion, the Queen has commented on the state of Australian politics.
Her Majesty met Australian prime minister Julia Gillard and opposition leader Tony Abbott during her tour of the country.
Speaking with Mr Abbott, head of the Liberal Party, the Queen said forming minority governments was always problematic.
She was referring to the political situation in Australia, where Ms Gillard had weeks of negotiating before she was able to form a government after elections last year produced no overall winner.
Mr Abbott met the monarch for an audience in the morning room of Canberra's Government House.
The Queen wasted no time raising the issue of the precarious state of Australian politics saying: "It is an interesting time."
Mr Abbott replied: "It is never dull, we play our politics tough in this country and give no quarter, Australian society is always dynamic."
The monarch then said "a minority government is always a difficult thing to organise".
Meeting the Queen, Ms Gillard bowed her head twice, although she has been criticised this week for deciding not to curtsy when the pair first met.
The meeting came as the country's former prime minister, Paul Keating, revealed in his newly published memoirs how he once told the monarch the nation no longer needed her.
Mr Keating says he told the Queen at Windsor Castle in September 1993 that Australians felt the monarchy was outdated.
The former PM, who once so outraged the British press by placing his hand on the Queen's back during a visit in 1992 which saw him dubbed 'The Lizard of Oz', said he told her Australia had changed vastly since 1954.
"I told the Queen as politely and gently as I could that I believed the majority of Australians felt the monarchy was now an anachronism, that it had gently drifted into obsolescence," Mr Keating told The Australian newspaper.
He added that the Queen sat through his remarks, before commenting: "You know my family have always tried to do their best by Australia."
To this he replied: "Yes, I know that ma'am."
Most of the Queen's 10-day Australia trip is focused on the capital Canberra, with outings to Melbourne and Brisbane, before she leaves for Perth.