Ms O'Dwyer says it is now neither a house of review, nor a house to protect the states' interests.

"Rather, it has become a forum to frustrate the government's agenda and the will of the people," she said in her valedictory speech on Wednesday.

"This has contributed to undermining faith in our democracy and its institutions and long-term policy outcomes for our country."

Ms O'Dwyer supports an Australian version of the Salisbury Convention, an agreement that the Senate won't obstruct government policy from passing if there is a mandate from the public.

The member for the Victorian seat of Higgins since 2009 also cited concerns over social media and the "proliferation of tribal echo chambers" for leading to warped views of what Australians think.

"Time spent in the community is the best antidote," she said.

Ms O'Dwyer, who is also minister for jobs and industrial relations, announced last month she would quit politics ahead of the federal election to spend more time with her family and try for a third child.

As the youngest-ever female cabinet minister and first minister to have a baby while serving in cabinet, Ms O'Dwyer reflected on the work-life struggle for working women.

"We sell ourselves short as a nation if we don't maximise the talents and expertise of both halves of our population," she said.

"I hope the example of female trailblazers in this place since federation, as well as my own lived experience, demonstrates to women contemplating public service that you can have a family, serve at the highest levels and make a serious and lasting contribution to your country."

Australia needs more flexible work arrangements for parents, particularly for men who want to take on more caring responsibilities, she added.

The Liberal MP has been a member of the party since the age of 17 and has since been minister for revenue and financial services, small business, assistant treasurer, parliamentary secretary to the treasurer, as well as minister assisting the prime minister for the public service.

Ms O'Dwyer thanked former prime minister Malcolm Turnbull and his successor Scott Morrison for trusting her with ministerial responsibilities.

The retiring MP also repeated a snippet of her first speech to parliament in 2009 - a reminder that politics is about people.

"And that people can make a difference," she said.

"That is why I am here. I look forward to playing my part in building an even better Australia."

Australian Associated Press