I am Australian and I mainly use the following:
Amazon
Smashwords
Baen
BeWrite
For classics/public domain I use:
This site (plenty of uploads of public domain works here)
ManyBooks
Feedbooks
Project Gutenberg
All of these sites except Amazon are DRM free and all except Amazon generally offer both ePub and mobi meaning that you have more freedom to choose an eReader you like (most of them - other than Amazon's Kindle - supports ePub).
Now, here's the bad news. In terms of big name authors who are still in copyright, Amazon seems to be the best source for Australians, and only what is not georestricted.
Kobo might offer something on the ePub side and is probably fine for more readers than just the Kobo - although not really good for Kindle users. I haven't used it much myself as I have a Kindle and I haven't been bothered to jump through any hoops.
If you like libraries, an ePub reader is probably better at this stage. I haven't done a full assessment of Australian libraries on Overdrive, but I understand the Singapore Library will allow international patrons. Apparently Kindle will offer library lending through Overdrive some time this year, but it will be U.S. only at the start. God knows when it will be available to Australians.
Regards
Caleb