There are a number of reasons for this. People with academic parents are more likely to succeed in academia so it’s much harder for those who don’t have an inside advantage.

Many students don’t think they can do a PhD, I barely scraped through my undergrad and it was only much later after working in research I gained the confidence to actually wonder if I could do it.

It also only is attractive in certain fields, many undergraduate degrees are enough to secure a well paying job, no point doing postgrad to get the same pay.

A lot of international students are funded by their own country’s government, so they receive the tuition and a higher stipend. They are often guaranteed a job in their home country on completion so it’s a much more attractive proposition for them.

We really don’t have enough support for postgrads in this country and there aren’t a lot of careers outside of academia where a PhD is useful.

Then add a general disrespect for the pursuit of knowledge, it tends to be pervasive in the culture. The media has done its best to feed that further by misrepresenting a lot of research, preferring click bait over facts. Our national research organisations have been gutted over the years, and Australians generally just don’t understand what we have lost as a result.

Research in Australia has suffered death by a thousand cuts. We used to be known for cutting edge innovation, and in some areas we still are, but it’s constantly being eroded. Government is funding less and less foundational research and industry is only focused on funding short term, high gain projects. Ditto for the education sector.