It was a study released about four years ago, I believe by Sustainability Australia.
That's right.
The study said that with the available resources, Australia's optimal population would be somewhere around 5-7 million (optimal being the level at which people can enjoy using as much water/electricity etc etc as they can pay for). The absolute maximum would be 45-50million, at that point, serious shortages of water, food and electricity would be normal.
There's a reason why Australia is one of the most urbanised countries in the world. In a country the size of the US, out of a population of 20 million - the eight capital cities house more than 65% of the population (42.5% in just Sydney and Melbourne alone). That doesn't include major non-capital cities. The resources required to make even a more portion of the land able to sustain agriculture (even cattle raising) are enormous, frankly I think we've gone beyond where we should.