Jokes aside, in both countries you need to have lived there for two years to get benefits, not six months. A student loan, however, is available immediately to Australians, and you can borrow an extra $150 per week (back in 2007 anyway) for living costs. I assume HECS is available immediately to NZers in Australia too.
In Australia it pissed me off that all the uni students were complaining and even protesting about their HECS contribution percentage (what is it these days, about 1/5th of whatever you cost the gov't?), yet pilots were unable to get gov't funding at all for their training.
I could have worked full time and flown an hour a week for four years (didn't have the luxury of living with the olds) just to get a CPL, then another year or two for the multi instrument and instructor ratings. Probably would still be training! Instead, I went to NZ, got the loan, had it ALL done within 12 months and now I have four years industry experience on top of that. I'm pretty sure I made the right choice, and I can tell you I had/have just as much motivation and passion as anyone who paid for it as they went!!
Limit the places and find the right people, sure, but I don't think cutting the places to nearly zero is really a help to the industry.