I agree with Chalk's assessment that the Japanese could never have fully conquered the vastness of Australia. In the absence of the U.S.N., however, the Japanese probably could have conquered the coastal population centers or blockaded them into some degree of submission. Trying to maintain control of said cities for any sustained period of time would have been extremely difficult, if not totally impossible, for the Japanese military. I foresee a "conquered" Australia quickly becoming Japan's Vietnam.
I'm not a flag-waving jingoist reactionary but I do take some umbrage at any attempt to discount America's contribution to the ultimate outcome of WWII in the Pacific. Simply being sick of something doesn't make it any less valid. I'm not sure the claim of Australia "holding [its] own" against Japan can be made with any credibility considering the massive involvement of the U.S. military in the Pacific Theater. That's like Americans claiming that they could have/would have won the war in Europe without the help of the Soviet Union. Really? Come on.
By all accounts, the Australian militiary contribution in North Africa and Italy was outstanding. Due to the U.K.-directed commonwealth system, the bulk of Australia's best units served in the ETO, though. According to Max Hastings' (a Brit) in Retribution, the performance of the Australian military in the Pacific, as her forces inched further from their home country/continent, was less than spectacular, if not highly suspect. Dockworker strikes in Australia also disrupted operations in the region. That dockworkers decided to go on strike in the middle of an ongoing World War- a war that directly threatened Australian sovereignty- is almost beyond belief. I haven't read that much specifically on the subject of Australia's military contribution in the PTO so I don't necessarily take Hasting's assessment entirely at face value but if what he writes is even partly true, it further discredits any claims that Australia could have "held [its] own" against the Imperial Japanese military.
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