Australia is extremely relaxed in terms of dress requirements. So much so that many Australians really struggle to understand what is required in more formal situations.
The biggest factor affecting the locals dress sense is the weather.
If it is hot, then they don't wear much. They are more aware of the dangers of the sun though and if flesh is on display, it is often smothered in sunscreen prior to venturing outside.
In summer or in the hotter areas like Queensland the usual dress is shorts and flip flops (or thongs as they are known in Oz) and a shirt of some description.
The usual travel advice stands......
look at what the locals are wearing and adjust accordingly.
Having said that you are unlikely to cause offence in this fashion liberal country