Adding more spent fuel to a pile that is already "infinite" (with respect to how many weapons could theoretically be made from it) does not increase risk. The barrier to proliferation is not a limited quantity of spent fuel, it is the level of difficulty in getting weapons material from spent fuel. Getting such material from spent fuel is harder than getting it from raw uranium ore. Thus, spent fuel is basically not a proliferation risk.

It is less obvious that initiating nuclear power (for the 1st time) in developing nations does not have any proliferation risk. However, given that spent fuel is not that useful (no better than raw ore) for making weapons, it is still not clear that there is much risk at all in letting such nations build reactors. Uranium mining is also fine. The things that has to be controlled are uranium enrichment facilities and spent fuel reprocessing facilities.

Whereas proliferation is not a valid reason to oppose more uranium mines or nuclear power plants in Australia, a decision to not pursue enrichment would be understandable. The world community (IAEA, etc..) is now trying to get agreement on a policy of no new fuel cycle (enrichment or reprocessing) facilities in nations that do not already have them. Making an exception to this rule just for Australia would make this idea much harder to sell, especially to the developing world.