>It might buy half a seat in a future capsule once bigger fish have been pacified. Best if the Australian astronauts are already training in the US and ideally have dual nationality.

Ah yes, since Australians without US nationality have been flying into space this whole time right? All three Australian-born people who've flown became US citizens first. Meanwhile, Belgium, Italy, Mexico, and Israel have flown people on US spacecraft.

>The net effect will be to stifle Australian space innovation which competes with NASA goals.

What "Australian space innovation"?

>Launches from OZ will be a big no.

Ah yes, the Woomera field that has been used for manned launches for the past 40 years, right? No?

As misotaur said, Australia has nothing, absolutely nothing, to lose by allying with NASA. It's possible, for example, that SpaceX could get approval for using Woomera for launches, something ITAR currently prohibits.