Thank you all for your comments.
The situation I listened to yesterday was a jet departing Kunnunnura for Broome via Gib River and Curtin. The jet departed and was told traffic was a medical PC12 inbound at F230 from Gib River. The jet was held at F180 until the PC12 passed using KU DME distances. It would appear both aircraft were IMC and no sighting and passing was possible.
The jet would have been tracking using its FMS, and the PC12 would have TSO'd GPS, so the tracking would have been accurate compared to the NDB/VOR case.
Could the controller have cleared the jet into CTA tracking offset by10nm, 20nm, or 30nm. Offset tracking is a useful feature on FMS systems, and it would appear that a clearance would easily be accomodated.