Is it possible for a manuscript to be too Australian? Our humour can often leave foreigners scratching their heads, and a lot of our slang is unintelligible to anyone who hasn’t grown up here. I realise that I am being incredibly optimistic to even think that I could be published in Australia, let alone have the conundrum of changing things for an overseas audience, but is it possible? Would an overseas agent take one look and reject on the strength that it is too niche-ie?
In short: yes. How many Australian novels do you know of that have gone on to worldwide acclaim? It's not because Australians can't write; it's because we used to be a colony (or, rather, a collection of colonies and - YES, SOUTH AUSTRALIANS, I KNOW - some settlements). You don't see flotillas of New Zealand or South African - or, really, Canadian - writers setting the world on fire. The Canadians have a better chance because they can peer over the border to the US but considering how many outstandingly great writers they have, they're underrepresented on the world stage. As are writers from non-English-speaking countries. And I suspect the issue is twofold.
First, we are all considered to be 'in translation' because we are not writing in the dominant dialects of English - namely, American English and, erm, English English - nor are we considered to be writing stories that will be deemed to be of interest to Americans or Britons, and they have the largest English-language book markets in the world.
Second, as former colonies we are still trying to shake off our own and others' sense of us being 'less than'. The Australian, NZ, Canadian, Indian and South African publishing industries still fight regular battles to get rights to sell in their territories, because the British publishing companies just take them as their entitlement. They simply do not consider that we may want them. Canada has the worst time of it - as members of the Commonwealth they regularly suffer from the UK presuming they can have the rights for themselves, but American publishers want them too, although the Americans can be a bit more relaxed about it. It's a wonder Canadian publishers get anything done (they do, though, and very well).
So for an Australian author writing an Australian story, there's a very small chance they'll get published overseas, and it will probably be in genre fiction where readers are more interested in the story fitting the genre than in its setting. Young adult fiction also travels, because teenagers are less finicky about place than adults. But it's hard and dispiriting trying to get published overseas. If you're really intent on being published in the US or UK, it does make sense to not set your story in Australia and also to research the market for similar books in those territories.
As a point of interest I can tell you that, in my experience, the Americans are less likely to care about an author being from outside the US than the British care about a writer not being in Britain. But they still care about whether or not the story is too Australian for their readers and some things have been changed for some books (but not all) for US publication.