As for what would have most likely prevented this, well Hoosten is correct. E at 1200ft AGL would have done the job and is probably achievable.
I'll guarantee you, it would not have happened, simply wouldn't have. Australian ATC haven't put two together. Worldwide it is an incredibly low occurrence of ATC caused collision whether inside or out of controlled airspace.
I’m assuming the inbound aircraft was inbound for air work, so probably what would have happened for the separation would be clear the inbound to a level 1000ft above the outbound aircraft LSALT, and then procedurally clear the outbound aircraft. They would have been separated while in IMC. I’m not totally certain, but I believe that is something like what Hoosten is suggesting. Nobody would have been unduly delayed, it isn’t particularly difficult, and the separation is done by the professional paid $200k per year to do it.
Procedural radial separation is one way of doing it, another way is to delay the aircraft on the ground. Yet another way is to improve the surveillance to lower levels, less delay. If anyone wants to bang on about costs, yes, putting radar surveillance out there would be prohibitive. But guess what's come along and is being used more and more in GA cockpits, all while your ANSP is feeding the trough in Canberra.