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kangaroojosh
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From my experience, its only an “advantage factor” being hosted locally. Apart from that it is quite natural for a legit Australian business to host in the US because of the cost factor and options. Google local map verified business ,with Google Webmaster tools Geographical International Targeting set to Australia and relevant content, good link profile is all thats required to rank a local business. I have .com sites hosted in the USA ranking no.1 in Australian niche. Another option to get an edge is use cloud flare /railgun to use Melbourne / Sydney as your nearest geo.

PS: Having that said, I personally prefer hosting it in Australia.
cheers
Josh