Spewn - you are obviously well read, but that's quite a strange list. I can't quite see a rhyme or reason to your selections. I mean, Robert Drewe?? Of course, if you set up an Australia vs Rest of the World situation, we're not going to do well. Early Amis is great, but the last several have been unreadable. Partly because of our advantage in speaking English, Australians are very much overrepresented compared to our population on the world literary stage. There are some Canadian greats such as Alice Munro, but we're doing alright.
In terms of quality vs publishing, my opinion (after a fair few years of thinking about it) is that about the same % of authors get published in literary and popular fiction. I mean, for every aspiring Patrick White there's an aspiring Matthew Reilly. And both jobs take skill.
You should read the Booker shortlist one year. It's not all plain sailing. Some popular crap and some deadly bores.
I read Aussie stuff because it's nice to hear stories with local themes, locations, and voice. In some way, they all speak to the question of what it is to be Australian, which is a question I never get tired of.