My guess is that the bulk of the portfolio investment abroad is just a sensible diversification of assets by Australian investors and institutions. In 1983, before exchange controls were abolished, Australian portfolios had zero international diversification, and in time we will reach a level that is appropriate to our circumstances.
In the meantime, we will see outflows as we move from zero to the optimal level. In addition, we should not forget that other countries are also diversifying their portfolios, and in the process purchasing Australian equities and bonds. 5  World Bank, “Globalisation, Growth and Poverty”, 2002.