Not to mention that the Government itself is a big user of Google. Various Google services are integrated into the systems of a number of Government departments. Also, Google is actually an invaluable tool for policy research (or political research, e.g. googling for embarrassing press releases put out by your opponents in years gone by). The Government's censorship plans might be stupid, but they're not going to shoot themselves in the foot *that* much.
Well, the iPhone isn't exclusive to one company in Australia. All the major (and some of the minor) telcos here sell it and support it on their networks.