On the surface, the two stories seem contradictory: though, on a deeper level, they are an example of the larrikin-wowser dynamic at the heart of Australian society. The crucial point being that Australia does not have a strong tradition of civil society. It has a strong tradition of authoritarian and paternalistic governance (from the penal-colony days, through the Menzies era to the present, minus an anomalous period of fashionable liberalism in the 1970s, 80s and 90s) and arbitrary authority exercised as a means to an end (such as has been manifested in the oft-publicised incidents of police corruption), and of censorious social conservatism of the sort that would not fly in more cosmopolitan parts of the world. It also has an opposing tradition of borderline contempt for authority and propriety; the larrikin tradition, manifesting itself in everything from the Rum Rebellion to the stencil art scene, not to mention in numerous incidents of political, artistic or cultural radicalism or impropriety and, of, course the summary transformation of anyone who dies in the course of pissing off authority — even if they were undoubtedly guilty of unsavoury crimes (and most Australians, presumably, do not condone armed robbery or heroin trafficking in principle) — into a folk saint of sorts, as we are seeing now.
That's all very well, but the downside of this is that there is no centre to hold between the two; no entrenched, stable institutions of a liberal culture, but only a precarious balance in an ancient war between two extremes. Usually, these are well balanced, and things stay roughly where they are. Occasionally, one gets the upper hand, pushes the other back, and gains ground. It happened during the 1960s and 1970s, when the wave of cultural change that resonated through the Western world pushed back the the conservative status quo of Anglo-Saxon Protestant wowserism, itself undermined by the challenges of immigration and cosmopolitanism; it's happening in the opposite direction now, because of terrorism and the resulting culture of fear.