[Crazy Dazz]

The simple fact is that successive Australian governments, of both colours, have pursued what they believe to be "Free Market" economics. In particular lowering the impediments to imports, and reducing incentives for Australian Manufacturers.

The issue is that practically no other country reciprocates. All our major trading partners protect some or all of their industries in some way. This can be blanket bans or massive tariffs on certain imports, short-selling of their currency (China, and Japan previously) or other sneakier measures such as "luxury goods" taxes.
But of course our Pollies are aware of this.

There are a few reasons why we still pursue "Free Trade."
The "Economy" is essentially divided into 3 sectors, Primary, Secondary, and Tertiary. Primary is basically Mining & Agriculture, Secondary is often referred to as the "Manufacturing" sector, and Tertiary as the "Services" sector.

Australia has traditionally had a massive Primary sector, very small Manufacturing sector, but a large Services sector (by GDP). For a long time this actually made us quite unique amongst OECD nations. (Developing nations normally distinguished by big Primary sectors and not much else.)
Hence sacrificing our Manufacturing sector, has oft been seen as a relatively small price to pay.

Also, many FTAs, and their predecessors, are pursued for Political reasons. Some I agree with, some I don't.
Sucking up to America, generally a good idea.
Encouraging China's dependence on Maritime trade, is probably currently the greatest protection against war in the Pacific. (Although I sometimes wonder if we aren't feeding the dragon that will one day devour us?)
Our perpetual need to promote Australia as some kind of regional power in ASEAN, is I feel a sad joke, but that's just my opinion.

And lastly, there is the domestic politics. Traditionally manufacturing workers, especially heavy industry, have been cast-iron Labour voters. So simple fact is that the Libs are quite happy to see those industries dismantled. They certainly see no votes in saving them.
The problem for Labor, is the Greens irrational hatred for heavy industry.
I don't profess to understand exactly why Labor chooses the precise path it does, but clearly it involves some attempt to garner either green votes, Greens preferences, or Greens Senate support.

One of the ironies, is that I consider myself slightly pro-environment, at least in a practical sense. I believe that instead of shipping ore (and coal and LNG) o/s to be smelted in dirty & dangerous smelters. We should build clean, state of the art smelters HERE, and only export the (much smaller) final metal.
I also believe that our addiction to cheap disposable Chinese crap is not only wasteful but harmful to the environment.