I've dispaired at the cheap bike options available in Australia for years. BTH's good experiences with his BigW bike are refreshing, but the fact remains - ultra-cheap bikes are very low quality and generally unsuitable for their target and actual use. It makes no sense to fit knobby tyres on a bike with the generic "not for off-road use" sticker, for example.
It's called a market and economies of scale. All the local kids are riding to school in my area on $1500 downhill bikes with knobbly 2.5'' tyres because they are cool. Of course they have to stand on the pedals to ride along the flat at more than 5km/hr.
You can get a decent MTB for $500 and fit it out with slicks though.