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Google checks quite a number of things, such as:
- your domain TLD
- the IP of your domain
- whether you have physical address on your site (at the footer or not)
- whether you have links predominantly from Australian websites
Generally, get the TLD and don't bother with Australian hosting or get Australian hosting and don't bother with TLD if it hurts. But the domain is more important of the two. Clearly, with the ccTLD domain you'll be able to get listed in local (Australian) directories, get linked to more easily from local sites, etc.
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