Because moving millions into a barren wasteland and hoping it would work worked sooooo well in the Soviet Union.
Other than the natives getting uppity and blowing sh**t up from time to time, Israel has done a pretty good job of reclaiming "waste lands". link
You're comparing apples to oranges because:
1) Israel still has the Sea of Galilee and Jordan River as significant water sources. THe Australian Outback has none of this, other than maybe underground sources that won't be renewed.
2) Israel only needs short aqueducts, while Australian taxpayers would foot the bill for massive desalination plants and pipelines hundreds of miles into the outback.
3) Israeli agriculture is intensive due to the country's density. A scheme like that in Australia would likely grow extensive crops such as grains due to the geography.
4) Much of the existing farmland is already on the verge of turning to wasteland due to unsustainable water practices. Why expand farmland when existing ones are threatened?
5) I doubt Australia's people and politicians are willing to swallow the bill for thousands of miles of roads to facilitate transport, schools and hospitals to serve colonizers, a huge bureaucracy that goes with it, and so on. If you go on Google Earth and focus on central Saudi Arabia you can see green circles, which are only possible since:
- They have unlimited amounts of money to spend
- So they can afford massive desalinization plants and pipelines
- Even then, the wheat grown is bought by the state monopoly at vastly above-market rates, which is only possible due to the unlimited amounts of money they can spend