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Short answer
Yes, using a VPN is generally legal in Australia for everyday privacy and security.
What still applies
Illegal activity stays illegal, and services' own terms still apply.
Data retention
Under the mandatory data retention scheme, Australian telcos and internet providers must keep certain metadata (such as account details, IP addresses, and connection times) for at least two years. They aren't required to keep the content of communications or browsing history. With a VPN on, your ISP can generally still see that you're connected to a VPN and how much data you use, but not which sites you visit. The VPN provider can see that instead.