Does Heavenly Creatures count? Well, it’s New Zealand, but…
I think BigNik hit all the main points with his thoughts, especially about relying on the Film Commissions for funding.
I think he might have missed one additional explanation. Does the government still censor films? As an American, I don’t know the answer. I do know that Australia was just starting to get into a roll of low-budget scifi/horror types films in the late 1970s and early 1980s (Long Weekend, Thirst, Chain Reaction, Roadgames, Strange Behavior) when suddenly it started grinding to a halt. Turkey Shoot comes to mind as a movie hacked by censors, but I’m not sure if the OZ government got to it before the UK did. Also doesn’t Australia still have a banned rating, something like refused classifcation?
New Zealand is in a similar state, though completely separate to Australia, but Peter Jackson is an interesting anomaly.
None of his films have been funded by any kind of NZ film body. They were all either self-funded or produced by overseas companies. In a similar way to, amongst others, George Miller’s movies have been in AU.
The Australian Government no longer censors films, but they can “Refuse Classification” which means the film is effectively banned.
I have no doubt that the AFC has role in the situation, but maybe it is just a numbers game.
Look at Hollywood, for every great movie you see produced from the States, lets say 20+ (at least) are average or just plain bad movies. (I’m plucking that ratio from my bum, but bear with me) So because Hollywood churns out ~600 movies a year there are ~30 ‘good’ movies released a year. Even that sounds pretty generous to me.
Presume Australian film makers have the same success rate, Australian productions (with a theatrical release) average between 15 to 25 total films per year (has been between those levels since 1985 Reference Graph ), so using the Hollywood average, you’re now looking at 1 or 2 good Aussie films per year. Which given the listings in just this thread of Aussie movies considered good, you’re looking at ~20 over the last 20 years - sounds about right then?
I thought Australia was terrible. I was almost embarrased to be Australian at the thought that this movie was supposed to stimulate interest in Australia overseas. 
But I loved Kokoda - go see it/rent it. Well worth it IMO. It ranks right up there in my war movie collection with Platoon & SPR, with the bonus that it is about Australian troops. It was a really good companion to the Kokoda book written by Fitzsimmons which I read around the same time.
It sounds about right for “Good” films, but the problem seems to be that there’s nothing between “Good” and “Arthouse/Special Interest” or “Turgid”.
There are countless movies that get released in the US that aren’t great but they’re quite watchable- something like A Scanner Darkly or The King of California, to use two subjective examples.
We just don’t seem to have that here- the movies are either really good (Mad Max, Gallipoli, Priscilla, etc) or one step up from Student Films, or… well, you wonder who the audience was.
Kokoda sounds like the sort of film I should like, but I’m reliably informed it’s largely talk and “mateship” and not nearly enough action given the subject matter.
wtf no mention of Chopper? That movie rocks!
Keiffie’s done himself a mischief 
The amazing thing about that movie IMO is Eric Bana, he’s gone on to some great roles. And he started out as ‘Poita’
Perhaps it has something to do with the scarcity of diners… 
Reservoir Dogs
Five Easy Pieces
Heat
Training Day
A History of Violence
Pulp Fiction
As Good As It Gets
True Romance
Goodfellas
A Time To Kill
True good point.
As you said upthread, I suppose you have to look at why so many of our movies are ‘special interest’, and I suspect the answer is as has been mentioned, the sourcing of funding for film projects, coming through a ‘closed’ shop of the AFC.
Definitely a fair bit of the ‘mateship’ riff but I personally found that there was enough action in it. It’s not the sort of set piece thing you might expect from say SPR, but I personally think what was done is far more reflective of the style of fighting that actually took place there. I might give it another watch over the weekend to check it’s as good as I thought.
[I don’t know how willing you personally might be able to ignore the probable errors in the models of Lee-Enfield being used though 
]
Someone sent me How Many Aussie Movies Did You See This Year after we had had a similar conversation. It says it all really:
From the little seen (everything we made) to the over-hyped (Baz’s Australia), the film industry slopped up more of the same: “realistic” dramas set in the bush or outer-suburbs about “worthy” subjects like mental illness, Indigenous rights, refugees, broken families and alienation. These are subjects, it seems, that the great unwashed should be paying money to be “educated” about. As if the public has a cultural responsibility to go and see the story of an outback farmer taking in an Afghani woman who has fled a brothel. Such films are made with good intentions, but without audiences and they are at the heart of the Australian film debate.
and entirely to the point because I see a lot of movies:
The content and themes of the films that are being made is a key problem here, one that’s amplified by the way the films are marketed to the public. How many of these movies did you see? Bitter & Twisted, The Black Balloon, Cactus, Dying Breed,* Hey Hey It’s Esther Blueburger**, Men’s Group, Monkey Puzzle, Newcastle, The Plex, Son of a Lion, The Square, The Tender Hook, Ten Empty, Three Blind Mice or Unfinished Sky? *
Well none actually.
x2
The only ‘Australian’ movie I saw this year was Australia, on DVD, and begrudingly made to watch by my better half, and I hated it.
I’ve like the ones I’ve seen with Abbie Cornish. (Candy, Somersault.) I also liked Jindabayne, though it felt like the plot was ripped directly out of a minor piece of Short Cuts. Ignoring that, it was pretty good.
Other than that, not so much. I tried to watch Chopper but couldn’t get through it. I recorded Australia, let it languish on the DVR for weeks and weeks, then deleted it in a purge to free space. Then I recorded it again, only to have the exact same thing happen. (Just last week it had to go.)
Not sure what the answer is, other than to put Abbie Cornish in everything.
EDIT: Oh yeah, and I was surprisingly riveted by Ganja Queen, though being a documentary that doesn’t really count.
Curious: why isn’t The Matrix (shot in Sydney, co-produced by Village Roadshow, co-starring Hugo Weaving) considered an Australian film?
No Australian accents?
Written, directed and largely starring Americans. Those are big factors, IMHO.
And produced by an American company. A good example is Star Wars. It was produced by an American company, but most of the production was done in the UK by a British crew.
Now I’m curious. Are the films that are self-conscious and stiff really written by Australians? I ask, because if you read books set in New England, the ones that feel right and are not purposely drawing attention to how the upper northeast is preceived are inevitably written by people who live here, and those who try way way too hard to develop a sense of place are written by people who might have vacationed here and read some historical stories.
Yes, although Danny Deckchair appears to have been written/directed by an American storyboard artist, AFAICT.
But my take on this issue is that it’s an attempt to differentiate our product from films made overseas… only they sometimes go overboard.
Also, a Sydney- or Melbourne-based filmmaker writing about a small country town might as well be writing about another country half the time. It really is a different culture out there.
For those interested, here’s the trailer to Bran Nue Dae.