If they're worried about hacking it, it's a complete farce; there's no reason why the computer doing the sums even has to be connected to the internet, seeing as I think all the ballots are counted by people (they're farcically large ballots often described as table cloths), they just plod in a few numbers as the data comes in. Someone must be worried that competent, impartial people will have a look and find something which has been giving out porky pies.
They said "hacking or manipulation", they mean that there are potentially bugs which could be triggered by malicious input. The computer doing the tally is not connected to the internet. This is a bit alarmist and they have only tried playing the card recently, the AEC seems to be getting desperate.
The real reason is the other one that they offered, "underpins the industrial and fee-for-service election counting systems". The AEC makes a fair bit of money running elections private organisations and other countries. While what they primarily offer is impartiality, technical assistance is a strong component and they obviously feel that releasing their software would impact that business.
The AEC tallies have been independently verified several times, there isn't a substantial case that the election outcomes are being distorted. However I still believe that the code should be public.