Origin
There are numerous theories about the origin of the term. Before World War I, the term "digger" was widely used in Australasia to mean a miner, and referring to a Kauri gum-digger in New Zealand. In Australia and New Zealand, the term "digger" has egalitarian connotations from the Victorian Eureka Stockade Rebellion of 1854 which, in turn, may have had resonance from earlier use of the term Diggers as egalitarians. Many Australian and New Zealand soldiers in the Second Boer War, 1899–1902, were former miners and at the Battle of Elands River (1900), the Australian defenders earned a reputation as diggers, hastily constructing dugout defences in the hard ground. Another story for the origin of this term dates it to 25 April 1915, during the Gallipoli campaign. Following the landing at Gallipoli, General Sir Ian Hamilton wrote to General William Birdwood, the commander of the Australian and New Zealand Army Corps (ANZAC), adding in postscript: "P.S.—You have got through the difficult business, now you have only to dig, dig, dig, until you are safe."
However, there is no hard evidence to suggest that Hamilton's message is the reason why digger was applied to ANZAC troops in general. One other theory is the fact that ANZAC troops were especially good at digging tunnels between their own trenches and the enemies, and were regarded by both sides as diggers, one being derogatory and the other more in jest. The job of digging between the trenches was very hard, especially when both sides' diggers met in the tunnels. ANZACs believed that it was a compliment to be referred to as diggers, because it indicated you were good at a very difficult job.
W. H. Downing, in Digger Dialects (1919), a glossary of words and phrases used by Australian personnel during the war, says that Digger was first used to mean a New Zealand or Australian soldier in 1916. It appears to have become popular among New Zealand troops before being adopted by Australians. The word was not in wide use amongst soldiers until 1917.
You seem to be at least somewhat..if not very...interested in Australia’s Armed Forces.If I’m right in that assumption I’d strongly encourage you,if you haven’t already seen it,to see “Breaker Morant”,an *outstanding* film,based on a true story,about Aussies fighting in the Boer War.Truly one of the finest war films ever.In fact,that’s what’s gonna be in my bluray player tonight.