They have a small military. under 100,000 at most total?
For example, the American military has a HUGE number of personnel, over 1million. The American military has a huge variance of standards. The elite special forces here are some the best in the world, and then within the same military we also have joe grunt, who's half autistic.
Australians, because of having such a small military, allows them to keep a fairly high standard across their small amount of soldiers.
Does that make them better? On a man for man basis, yea, but with all the force multipliers in modern conflicts I think it's better to have a large amount of average soldiers equipped with large amount of force multipliers, like tanks, rockets, helicopters, etc etc than a much small group of better trained soldiers that lack access to the same force multipliers.
Seriously, it doesn't matter how good your infantry soldiers are when they have lost all air cover and are being hunted by Apaches.