Update: Please note that en_AU is now included by default in Magento so all this is unnecessary.
Simple tip here on how to enable the “English (Australia)” locale in Magento: simply go to app/etc/config.xml and, under config->global->locale->allow->codes add in the text <en_AU/>. Your config file should have something similar to the following:
<config>
<global>
<locale>
<allow>
<codes>
<en_AU/>
You can even do this before installation to allow the selection of the Australian locale during the install process.
Well with Magento v. 1.4 allowed locales are located in:
app/code/core/Mage/Core/Model/Locale/Config.php
If you want to still use config.xml as you explain you’ll have to comment out the locales arrays on Config.php as they have precedence over config.xml.