Hey pstyle,
First of all, one thing you will need to learn about Sydney - we drive on the 'wrong' side of the road
OK, seriously now, I have lived in Sydney for most of my life. Sydney's music scene has been on the improvement over the past few years. For a long time it suffered really badly with the introduction of pokies and horse/dog racing betting facilities to venues all around the state. Couple that with the licence that you needed to get in order to have live music ($50 000 a year I think), extra bouncers and staff costs, many licencees chose to abandon the plight of live music. Gambling was a much easier and 'hassle-free' way to make money. Luckily in recent times, the government scrapped the licence you needed to have live music and venues have started to put live bands on again. As far as full 4/5/6 piece cover bands, there is demand out there for it but it isn't endless.
Newcastle (located 2 hours north of Sydney and where I am living now) used to be the home of live music for the state of New South Wales (big country music following here), however it has gone backwards in recent times. The sole reason for this is the licencing sergeant from the police force, who is basically the cop who looks after licenced venues in our district, has been trying to cripple many hotels with sanctions, conditions on venue licences and has been trying to enforce his own laws upon many venues. This constant harrassment has caused many venues to abandon live music so as to not face possible fines or jail time from a guy who is looking to roast as many people as possible. I know that he has been trying to close down the pub I run (which, may I also add, isn't even my business) and is trying to destroy my hospitality career and reputation. Protect and serve, my a$$. Luckily it looks like he will be fired soon as he handed out a $1000 fine to the licencee of a venue for not mowing the lawns on council property.
In reality, Melbourne is (or was...) the home of live music for Australia. Just recently, the police force tried to impose the same licence on venues for live music that Sydney had recently scrapped, but I think a protest of about ten thousand musicians down the main street of Melbourne convinced the government to scrap idea of the licence. Maybe see if your girl can transfer to Melbourne?
Hope this gives you a bit of an idea on Sydney's scene!
Cheers,
Jordan