Well the SLR was made under licence in Australia by Lithgow, likewise the HB version (c. 10k). I don't think anyone liked the HB much, the British never adopted it and kept the L4 Bren, the Rhodesians were apparently hot and cold on it over the years too. As far as I know only South Africa and Canada produced and issued it in quantity.
The 'GPMG 7.62mm M60' was adopted by Australia in 1960, but I can find no reference to it being manufactured in Australia on Lithgow's site (http://www.lithgowsafmuseum.org.au/milproduction.html
). I'm guessing therefore that the Americans gave them a better deal than either RSA Enfield or FN Herstal.
Given that they also virtually stopped buying British vehicles except the Land Rover, after discovering the maintenance nightmares that were the Saladin, Saracen, Ferret and Champ, in favour of diesel M113s from GM and International trucks, there may have been an air of "ffs don't buy British" at the time too. I would like to hear the real reason though, purely for curiosity's sake.
As for the M16, the Australians had been using the SLR since 1958, so if the M16 was so bad as claimed, I doubt they would have issued it at all. That they did says it had its uses. As the pics above show Owens, M60s, SLRs and M16s, they were at one point all in use at the same time too. If the SLRs were running low on ammo, it was more likely because they had loaded up on spare belts for the M60, rather than two pouches of SLR mags.