Hi
I know this thread is old now, and I came across it while searching somewhat related questions....however according to the comment above, from what I understand this is not technically correct. A baby born in Australia to parents who are both not citizens (i.e. permanent residents) means that your new born will also need to apply for citizenship the same way you would (obviously after x amount of time).
Happy to be corrected here, but unless one or more of the parents are an actual citizen at the time of birth, then the baby won't gain automatic citizenship. I'll assume Kate10 has had her baby now, so maybe she could clarify what happened in her situation?
Cheers
Mark