I would refrain from referring to it as incompetence, as I feel that ignores the true nature of the system.

The problem is that the Australian political system needs to appease to the centre. That's how parties get into power. As long as that's the case, it doesn't leave a whole lot of room to meaningfully tackle the problems plaguing the country (in particular, housing).

Your point about not tackling the hardest challenges is well made. However the benefit of needing to appeal to the political Centre (a factor of compulsory voting) is that Australia also avoids the crazy swings and debilitating division of left and right that other nations can face.

Correct. Though it'll be interesting to see how this plays out in the end. I wonder if the centre will change, or if the centre by design remains the same and the outliers merely grow. I'm not sure how it'll play out.