What if the British do not hand over control of the Northern Territory to South Australia in 1863?
What if it remains under British control into the 20th Century?
What happens now?
Is this plausible?
Well I think it probable that some sort of more formal supra national community or alliance would have been formed post WW2 - akin to other groups like the EEC.
Currently NZ and Australia have a series of
formal treaties which govern our close co-operation in trade and defence - these agreements, or at least the former anyway, mandates that we co-operate closely on policy and the drafting of legislation. For defence issues we have a close relationship (for example NZ uses the Australian Defences Forces Officer training school at Duntroon, AU) but the waters are kind of muddied by the ANZUS Nuclear issue. We also have quite generous access rights either way - so permanent migration or movement (but not welfare) between the two countries is incredibly easy (at present). However there is no formal organisation that runs this - it is all state to state and the closeness of the relationship often is based on things like personality of the two PMs.
So with this in mind, and assuming no POD that stops the above relationship developing then any different time line will probably have a similar relationship, but this time with three rather than two nations - NZ, Australia and Northern Australia. If this is the case, then perhaps a simple state to state situation won't work that well, given that 1) the above relationship dynamic exists, 2) the states all were part of the Empire/Commonwealth and hadn't fallen out in a significant way, 3) NA was still rather poor in terms of population and otherwise relative to R(est) O(f) A(ustralia), and NZ, 4) the three nations are still all likely to be dominated by English speaking British migrants who like to stick together, and 5) there are significant numbers of other Commonwealth, Australian or NZ territories/dependencies/protectorates in the near Pacific that might later wish to join such a group- so perhaps a formal organisation would be a better tool with which to organise with for defence, commerce/trade and general international advocacy - so a much stronger South Pacific Forum.
We could call it the Pacific Commonwealth Organisation - there would be no capital - meetings would be regular but based at member states capitals (like APEC is today). Range of responsibilities could include a common naval force (maybe not likely), mutual defence, training etc; for commerce - a common currency perhaps, development banks or loans, uniform law drafting, tariffs/quotas etc. I wouldn't think there would be any need for a parliament or anything like that.