This is not the first time that Australia has ditched the kilt, according to Frank Adam in The Clans, Septs and Regiments of the Scottish Highlands 1934

From Appendix XXXVII -
Abolition of the Highland Dress in the Australian Army

The following letters, which appeared in the "Argus" newspaper (Melbourne) during June 1915, will give my readers an idea of the Scoto-Australian sentiment with regard to the above matter, viz:-
Where are the Kilts?
"Sir, -I read in the "Argus" of yesterday these words:-"I can assure you," Senator Pearce said, "that anything the Ministry can do to stimulate recruiting... it will do; and neither money nor effort will be spared." Why did his Ministry hurl insult upon insult on Australina Scots, and ban the kilted regiments? We will forgive the insults and raise a thousand men in a few days, if kilts are reintroduced for home and active service. Will Senator Pearce keep tot eh promise above quoted?
Yours, &c,
Clan Menzies

"Sir,- I am sure there are thousand of Scots in Australia that will agree with "Clan Menzies'" letter today. I am sure that if recruits for a Scottish regiment were called for, thousands would apply in a few days. All my people have been connected with Scottish regiments. The Canadians have their Highlanders, and why can't we? Give us the right to fight in our old uniforms and we will still be there. This privilege would stimulate recruiting more than all the posters and platform talk in the world. I would trust some of our wealthy, influential Scottish Australians to take the matter up.
-Yours &c,
Cameronian
Adam goes on with personal correspondence:
Melbourne, 18th July, 1923
Dear Sir,- With reference to your letter of the 4th June requesting information resepecting Scottish regiments in the Australian military forces, I am directed to inform you that there is now no unit of the Australian military forces with any national title or distinctive clothing, and there are no pipers connected with the military forces.
-Yours faithfully,
(sgd) T. Trumble
Secretary,
the Department of Defense.
Anyone know when they brought any element of Scottish dress back into the army?

Brian