PhD approved by advisor, rejected by examiners
It is difficult to answer the question without also judging the supervision and other aspects of the student-advisor "relationship". I have been involved in a case which also resulted in a fail. I, being non-Australian) got the impression the thesis was done either by meeting a time deadline or by the student "deciding" so. I cannot imagine any advisor would recommend the thesis as completed in the shape it was. I could not, as examiner, figure out what rules made the thesis judged as competed, it would simply not go in my own system.

In my case we bring in an examination committee from other universities and mostly from abroad. The thesis must stand an international scrutiny. This also means the advisors and students are aware of this requirement. In your case, as well as the one I experienced, I ask myself what sort of system is in palce to safekeep the general scientific standard?

As you can see there are many open questions which makes a simple answer difficult to provide. In some cases it might be possible to use the feedback to improve a thesis. In the US system it is common that a thesis is given revisions to complete. In my system (Sweden) all this quality work has to be made before time, there is no recouperation after a fail. Hence, the options depend on what is possible within the Australian system. If it is possible to revise and re-defend? then that is one way. Tpo take the work elsewhere might be possible but if the work does not stand international scrutiny then that option does not look bright. If there are deeper misunderstandings that lead to the verdict then it might be possible to claim a "mistrial" but failinga PhD thesis is not a good thing under any circumstances. I am just left wondering why it happened, not so much to put blaim but it seems something(s) must have failed in the process and finding out the reasons may provide a better view of possibilities to go forward.

finally, start again? another 3-5 years ona different project will require both a strong interest and financing (I would presume). It is possible but usually, I do not think anyone would subject themselves to another PhD period lightheartedly.

EDIT:

An example that just occurred.