Authorship and reputation for British/Australian academic systems
Academics in Australia are usually on temporary contracts or on continuing contracts. Levels, however, don't directly relate to job permanency in Australia. For example, it's possible for an experienced postdoc (temporary, employed on PI's grant) to be paid at level B (starting rate is typically level A; step 6) and it's also possible for an academic to be appointed at level B for a continuing position (similar to tenure track). Although some level Bs will be on continuing positions, it's also possible for an academic at level C to not have a continuing appointment (e.g. a Future Fellow whose dept. has not committed to support him/her after the fellowship runs out). Yet they are still at level C because that is the appropriate level for their career stage (i.e. IF they had a permanent position, they would be appointed at level C). Most of these people, however, can leverage such a fellowship into a continuing position and start their own lab. This is similar to starting a tenure track position in the USA.

I think it's best to think of levels as representing career stage not the type of job (i.e. the level does not determine whether an academic is on a temporary or permanent contract, especially at levels A/B). You don't rise through the levels from a temporary contract to a permanent position - you must separately apply for a continuing position. This is analogous to how postdocs must apply for tenure track positions in the USA.

With regards to authorship, I think this is very group dependent. Typically postdocs run their own research and get first author while also supervising honours/PhD students and getting a second/middle author paper for that work. The way you describe this in your question (postdocs getting middle author papers but few/no first author papers) does not fit with my experience in Australia but it might occur in some groups. You could, however, find groups like this anywhere in the world. This is something you need to discuss with your potential advisor. 

Note: this post has been heavily edited from the initial version to address questions in the comments.