I think each state has their own requirements. This is from the NSW Maritime website....
When do I need to wear a lifejacket?
It is not a lifejacket if you are not wearing it.
Do not wait for an emergency to wear your lifejacket. It is like wearing a seatbelt - not much use putting it on after an accident. It is important to remember that conditions on the water can change rapidly and in an unpredictable fashion.
In general, you should wear your lifejacket when:
Boating in poor weather conditions
Crossing a bar (a higher risk situation for capsize or swamping)
Travelling at night
When a squall or storm approaches
If you have children on board, or people who are poor swimmers encourage them to wear their lifejacket at all times. Ensure each person has a jacket of appropriate size and type - check with your local authority if unsure.
I only wear mine while 'offshore' or when conditions get lumpy. I'm a relatively strong swimmer and comfortable in the water having surfed, dived etc all my life. Others that aren't as comfortable should wear them at all times. which is probably a good habit to get into whilst yakking.