Though however convincing the plan was to create an independent nation out of the Kimberley region, I could still see the British Commonwealth and Australia seeing the plan as an encroachment into sovereignty and as such rejecting it as PM Curtin did originally.
For the sake of argument, hypothetically the plan is accepted and is as such only a resettlement/immigration plan instead of one to create a separate nation. 75000 a population may be reasonable, the Kimberley and Pilbara support about the same population nowadays. But I can't see that desert environment sustaining a few million people. WA and the rest of Australia as a whole could strain to support a few million more through intensive agriculture but that might cause more environmental impact than OTL.
Unless of course, the same minds behind the Negev Desert agriculture immigrate over here and do the same work on the Pilbara and Kimberley.
Culturally, if the plan was allowed, there would be a strong impact. After all the post-war European immigrant wave which happened predominantly during the 50's and 60's caused a strong cultural shift in Australian society. Religiously, you may have a large convert population within the local Aborigines. Also you may have more Jewish civil rights groups protesting treatment of the Aborigines, given their own Holocaust experience.
Politically, Australia could have a large Jewish representation in parliament which may impact of Middle-Eastern policy. I'm not sure if a pure Israeli political entity still exists to a large degree if the Kimberley plan goes through especially if millions of Jews end up in Australia instead as you implied. I'm sure Zionism wouldn't disappear though and the desire for a Jewish nation in the traditional lands won't as well. These will be major issues for the Kimberley Jews.
I don't know enough about the history of Palestine to judge whether the situation will be less volatile without an Israel. Perhaps the Middle-Eastern region will be better off, I'm not too sure. But the world, is a big ask, maybe so, maybe not.