The problem with Australia is that too little thought was given to making viable cities outside of the state capitals. I would love to live in a smaller town but my partner needs a major STEM research university to work at. Europe has such universities in small towns, but Australia does not. Everything is too concentrated in the capitals.
Though even as a Sydney-sider, I don't consider Canberra to be a small town. Not after living in German university towns for the last 5 years with pops <150k.
Having said all that, Canberra is an example of how Australia has (once) planned out a charter city and had it succeed. However I am not sure we can do it again without the federal government being as deeply committed as it was in overseeing its own future seat.
It's a good idea to be critical, and to encourage others to be critical, about whether that really makes sense.
This meme that you can't grow except through sprawl is pernicious. Most cities are choosing to leave options on the table.