No dual citizens in federal parliament. That 30% are, generally, extremely under-represented in the political system. This is by choice of interpretation of the current federal judiciary (High Court).

At a state level, in many states, rules for dual citizens are more complicated, but result in a similar situation.

I can understand the need for this legislation, but it does tilt the balance in favor of 3rd+ generation Australians (as many 2nd generation Australians can inherit their parent's citizenship).

Yes, if your country of non-Australian citizenship allows you to renounce it, that is recognised in Australian law. But it can be a complex process, with little value unless you have political ambitions (or maybe complex tax issues ;-) ).