A modernized HMAS Australia in Southeast Asia

Could HMAS Australia remain useful into the Second World War?

Yes; a major interwar refit and fire-control radar could make it a valuable regional capital unit, even though it would not become a first-rate modern battleship.

Retention would probably lead to a major late-1920s or early-1930s refit because Australia would treat the ship as its principal capital asset. Fire-control radar and improved machinery would make the old battlecruiser more useful by 1941. It could join Force Z or the American-British-Dutch-Australian command, perhaps alongside a carrier. The distinction is between an obsolete design becoming unbeatable and an old hull remaining operationally valuable after sustained investment.