In addition to yesterday's Best Books of the Year, Locus Magazine has also published a Recommended Reading list for sf&f works from 2007. The Australian items are listed below (chances are I've missed one or two - feel free to point them out to me):
Young Adult Novel
Magic's Child by Justine Larbalestier
Collection
Rynemonn by Terry Dowling
The Jack Vance Treasury, Jack Vance, edited by Terry Dowling & Jonathan Strahan
Original Anthology
Wizards edited by Jack Dann & Gardner Dozois
The New Space Opera edited by Gardner Dozois & Jonathan Strahan
Eclipse One: New Fantasy and Science Fiction edited by Jonathan Strahan
Bests of the Year
The Best Science Fiction and Fantasy of the Year: Volume One edited by Jonathan Strahan
Best Short Novels: 2007 edited by Jonathan Strahan
Art
The Arrival by Shaun Tan
Novelette
"Dark Integers", Greg Egan (Asimov's 10-11/07)
"Glory", Greg Egan (The New Space Opera)
"Steve Fever", Greg Egan (MIT Technology Review 11-12/07)
"Holly and Iron", Garth Nix (Wizards)
"Sir Hereward and Mister Fitz Go to War Again", Garth Nix (Baen's Universe 4/07)