Why not? Australia wasn't widely called as such until the early 19th century, and it just means "southern land." Hell, they could call it Antarctica and it'd be fine.
Australia MEANS southern land but it DERIVES FROM the Latin name of the same meaning for a supposed southern continent. Australia IMPLIES a large southern continent that was not known to the precolonial Europeans. Antarctica is a possibility, it was used for other colonies in the southern hemisphere (like France Antarctique, in Argentina), though South Africa is more likely. Any other names that are generally southern (Antarctica, Antipodea), generally African (South Africa, outdated names for Africa like Lybia are possible too), or connect to a local tribe, or pseudo historical group, native name (
Monomotapa/Mupata, Namibia, Namaland, Awambia [these are all assuming the colony starts around Namibia]) or major regional British colonial figure.