I'm led to believe there has been a large reduction in Oz the existence of aero clubs,
In the last 2 decades, I would say there has been a decline in clubs - full stop. This goes across Rotary, Lions, car clubs, pony clubs, etc. Our society just works differently now. I don't think that the change in club participation has anything to do with the decline of GA.
The decline of GA is to do with:
1. Fashion (other activities have taken over / eaten into flying)
2. Reduced number of airports. The closed airports in the Melb basin include; Berwick, Moorooduc, Sunbury, Pakenham, Philip Is (nearly), Rockbank.
3. Urbanisation of Australia. There is just less need to go to country towns / country towns are smaller.
4. Improved roads / cars making driving places more competitive.
However, I would suggest that the single biggest reason for the decline of GA is....... CASA.
CASA is the single most prominent reason why GA in Australia is more expensive, more bureaucratic and just plain harder than either 20 years ago or compared with the FAA / USA.
20 years ago, you could walk up to a flying school and within an hour or so do your first flying lesson. Now? Pretend you know nothing about flying, but are interested in starting. Go to the CASA website and try and research what you need to get a student pilot licence and find the forms. I dare you!
At the industry briefings for the new Part 61 regs last year, the time delay and difficulty in getting student pilot licences probably came up as the single greatest impediment that flying schools have in securing new students.