That could be entirely true. I have heard from others that Australia has a stricter view of sexual material than we do in the US, which I thought was odd as isn't prostitution legal in your country?
Yes, apparently prostitution is legal in all states (not just Victoria).
I think Australia is more concerned with child safety (combined with some paranoia) than with sex matters between adults.
Not that that is an entirely bad thing. Children do need to be protected (but not from imagined "threats").