Australia has a highly capable, professional military equipped with small numbers of very complex, extremely expensive aircraft, ships, submarines and land vehicles. Australia could fight other middle powers and win, but Australia should only ever plan to be in a major conflict against a great power if we are in very good company.
The idea that Australia should have a military able to fight alone against China is deeply flawed. Fortunately, the prospects of a neatly bilateral conflict between China and Australia are remote. Australia deciding to fight alone would be an outstandingly stupid act of unilateral disarmament that discounted the value of powerful partners, notably the United States.