So Putin isn't scared of us on military grounds.
But on diplomatic grounds, things are a little different. At the moment, Tony Abbott is one of the few national leaders willing to confront Putin to any extent even in the diplomatic field - because there are serious indications that the Russians were involved in killing 38 Australia. And the Russians don't like that.
The Russians like the world to think that "We're good guys now, Da!" They don't like that image being challenged and questioned, even when they act like thugs.
“Believe me, I know the strength of the RAN, and I have no illusions about our ability to resist a concerted Russian attack”
It in’t the Russian Navy Australia should be worried about, anyway, but the CHINESE...
The recent moves of Russia and China SHOULD be forcing a rethink in military policy and spending among Western nations, but so far, it isn’t.
I should add to that - we'd also be hoping to hold out long enough for help to arrive from our allies who could help us successfully resist.
Primarily the US and the UK (Canada and New Zealand would also be reliable - probably the Dutch as well - but really it's the US we'd need, above all else. And that's why we've been a loyal ally for a long time now).