Data from new Australia Telescope Compact Array observations of a nearby gigahertz peaked spectrum radio source, PKS 1718–649, show significant variability both below and above the spectral turnover frequency during a nine month period. Simple models of synchrotron self-absorption (SSA) and free–free absorption (FFA) cannot explain the individual spectra or the spectral variability. Novel SSA or FFA models will need to be investigated in order to explain the complex variability in this source. Some potential explanations for the spectral variability are explored here but we can make no strong conclusion about which of SSA or FFA (or alternative mechanisms) causes the peaked spectrum in PKS 1718–649.