The original idea was that retiring ADF equipment be used for a national guard, so the concept is not entirely State funded and in any case the states get a large proportion of their funding from theFederal Government anyway.Extra dollars would be from the state not federally funded, which in turn would deplete resources from the SES not a good idea.
Any State funding in Australia for a reserve, local militia, national guard whatever you want to call it, would come at the expense of funding for the local police, health and existing emergency management departments, all of which are under-funded in Australia and would only provide unnecessary duplication of ADF or existing state resources.
I think the better course of action would be to bring in a managed retirement scheme, where existing ADF assets can be retired in a timely fashion, but with sufficient effective life left, so we can sell the assets wherever possible, rather than running them into the ground and then "wrecking" them...
But that would require a Government prepared to invest in Defence and make timely and regular funding decisions and we don't have that, which is why ADF is in the state it is.