Can I use British English in an Australian conference paper?
My question is whether the paper should be "corrected" to Australian
  English as it is an Australian conference, or if "correct" UK English
  should be allowed from a UK writer?


British English is acceptable in US-based or other places conferences that do not use British English. Each conference writes their requireements in the Call for Papers. Mostly, international conferences require English. But it is unreasonable to require specific English. Even if it Australian-based conference. Any English is acceptable. Just be consistent in the whole text on the English you choose.