This is a really good example of a difficult to parse headline. Why is the person who was arrested alleged to be Australian? Was he hosting a hacker, or hacking hosting? Or maybe he's alleged to be an Australian who happened to host a hacker, or an Australian who hacked hosting. Regardless, we can say that he was arrested, unless he's an Australian hosting hacker who's alleged to have been arrested, which is the sort of thing you allow when you don't require the words directly following "alleged" to describe the thing that is alleged.
(The correct interpretation is "An Australian who is alleged to have hacked hosting has been arrested", but I only came to the conclusion that that was the right one after looking at the article - which has a different and much better headline).