The disadvantage with diesel subs, other than being fossil fueled is, they are noisy, they have to run on battery when submerged, so have limited time submerged and become easy target when travelling near the surface to recharge the batteries, refuel etc and have a snorkel to run the diesel which is easily spotted.
They have to be refueled at regular intervals, which would be problematic as the fuel supply ships, or fuel supply installations up North could be easily targeted and neutralise the subs, plus they and the supply ships are sitting ducks for aerial attack.
Nuclear are only limited by how much food they can carry, they make their own drinking water and oxygen, so they can travel for months underwater, only limited by food and the crews ability to cope with the mental issues.
With Australia having such a massive coastline, with minimal population for most of it, nuclear subs are really the only mobile stealth platform that is plausible. IMO
Downside as you say they cost a stupid amount, but hey there is no point in spending half the amount for something that wont work.
Just my opinion, it's a bit like batteries/hydro discussion at the moment, it depends what sort of outcome you want.