According to the long title of the Australia Act 1986, its purpose was
“to bring constitutional arrangements affecting the Commonwealth and the States to be brought into conformity with the status of the Commonwealth of Australia as a sovereign, independent and federal nation”.
The Australia Acts (Cth and UK) eliminated the remaining possibilities for the UK to legislate with effect in Australia, for the UK to be involved in Australian government, and for an appeal from any Australian court to a British court. This formally separated all legal ties between Australia and the United Kingdom.
The UK Parliament’s power to legislate with effect for the Commonwealth itself was mostly ended with the Statute of Westminster 1931, when adopted by Australia in 1942 with the passing of the Statute of Westminster Adoption Act 1942. The Statute provided that no future UK Act would apply to a Dominion (of which Australia was one) as part of its law unless the Act expressly declared that the Dominion had requested and consented to it. Until then, Australia had legally been a self-governing colony of the United Kingdom, but with the adoption of the Statute became a (mostly) sovereign nation. However, the Statute only affected UK laws that were to apply as part of Australian Commonwealth law, not UK laws that were to apply as part of the law of any Australian State.
The Australia Acts 1986 in its two versions, together with the State request and consent legislation, brought the States in line with the Commonwealth, and amounted to establishing complete Australian independence at the date when the Australia Act came into operation, 3 March 1986.