Locus Magazine, which styles itself "The Magazine of the Science Fiction & Fantasy Field", released its 2004 Recommended Reading List in February, but negligent as I am, I'm just catching up with it.
The Australian entries in the list that I can identify are:
Fantasy Novel:
Glass Dragons by Sean McMullan
Young Adult Book:
The Keys to the Kingdom: Grim Tuesday by Garth Nix
Collection:
Black Juice by Margo Lanagan
Anthologies:
The Locus Awards: Thirty Years of the Best in Science Fiction & Fantasy edited by Charles N. Brown & Jonathan Strahan
Science Fiction: The Best of 2003 edited by Karen Haber & Jonathan Strahan
Best Short Novels 2004 edited by Jonathan Strahan
Non-Fiction:
x, y, z, t: Dimensions of Science Fiction by Damien Broderick
Novelette:
"Water Babies" by Simon Brown
Short Stories:
"Clownette" by Terry Dowling
"Earthly Uses" by Margo Lanagan
"Red Nose Day" by Margo Lanagan
"Rite of Spring" by Margo Lanagan
"Singing My Sister Down" by Margo Lanagan
My apologies if I've left anyone off the list. Write and let me know if this is the case and I'll update the entries.