Google indicates that it does.
Google looks at three things to determine your relevance to specific countries:
Each of these three things provide Google with information about your geographic market. You will be still included in the results for other countries however you will be given preference within your local results.
The following video by Matt Cutts discusses this in more detail.
Although the message from the video is to “experiment” that’s about as definate as anything you will get from Google about how to rank better.
So although it’s not essential, having your server based on an Australian based IP address could definitely assist in your Google.com.AU rankings.