hey mate - Im an aussie.
I've never had huge earnings from Adsense, just chump change, but I've never declared any of it.
There is a cap on internet earnings (and other small business) before it becomes taxable. I think it's referred to as "hobby income" or something similar.
I earn my money from a travel site - and the bookings from that are all above board. All IM related income goes straight to my Xmas/Holiday fund - maybe 5K a year. But none of it's reported.