Bobgnar, in answer to your question the Australian Regular Army wasn't formed until 1948.
Before then there was the Permanent Army, mainly staff officers and the Corps of Staff Cadets (Royal Military College, Duntroon), members of the Instructional Corps and some specialists, such as armourers and other maintainers, Royal Australian Engineer officers, garrison artillery and a few other odds and bods. Everyone else- infantry, light horse, artillery, drivers, etc- were militia and part of the Australian Military Forces. At the same time there was universal national service, so all young men (who couldn't avoid it by claiming exemptions) did their recruit training and then went to their local unit to do the rest of their 2 year's service.
This situation was the same at the start of WWI and WWII, and the government response was the same- call for volunteers and form the Australian Imperial Force (AIF in WWI, 2AIF in WWII) using the AMF units are the recruiting ground.
The troops who volunteered for the AIF were given extensive training, and the physical qualifications were quite high. For example, if you wore glasses you weren't acceptable for any of the combat arms, but may get a service corps spot if you had critical skills the AIF required (eg motor mechanic). Also, appointing members of the Instructional Corps supplying senior NCO's and field officers helped get the best training that was available, boosted by British instructors and trainers when the 6,7 and 9DIV got to the UK and Middle East.
At that time, and still today, Australian personnel have to volunteer for service outside Australia. (I had to sign a waiver volunteering for service at Kapooka, at the end of my recruit training, and again before deploying on service. Only 19 men who didn't volunteer were sent to VN, for example, and all were offered the chance to return to Oz within five months. Of course there was also a lot of coercion used, and peer pressure, but men who didn't want to go just had to stand fast and refuse to sign the waiver.) In late WWII they stretched the definition of service to allow troops to be sent to British and New Zealand possessions in the Pacific, which is how AMF battalions ended up on New Britain and other places not "Australia". The public backlash helped depose the political party that had sent conscripts overseas in the first post-war election.
The ARA was formed by a call for 2AIF or AMF personnel who wished to continue their service during the occupation of Japan. It consisted of three infantry battalions (formed from 65, 66 and 67 BN, 34 INF BDE to become the Australian Regiment, Royal Australian Regiment in 1949), and armoured regiment (only SQN/COY strength at first), engineer regiment, artillery regiment and some corps and supporting arms units.
Sorry for the long-winded reply, but a lot of people mix up the AIF with regular troops, not realising there were no real regular forces. In truth then, as now, the strategy was to have a small regular defence force centred on the navy and militia (and RAAF these days), with a vague idea that there will be time to expand and train before the next war. It's a strategy that barely worked in 1914 and 1939- and some who argue it didn't really work then (eg 8 DIV being captured in Singapore was poorly trained and badly officered- saying which will upset some Aussies on TMP ).
Dal.