There are two ways that you can be connected, that is direct to the exchange, or via a RIM/CMUX/ISAM/Other name. If you connect directly to the exchange, you can get ADSL2 if there is another supplier with ADSL2 equipment in the exchange. Telstra will enable ADSL2 on their equipment only if there is competition. (now with some exceptions)

If you are connected to a RIM, there are limited numbers of ports available. The number will depend on the age of the equipment, as telstra has changed suppliers. The older NEC equipment can have 500 phone lines, of which 96 can have ADSL. The newer equipment has a better ratio, approaching 1 in 2 if fully expanded.  On a RIM, you can get ADSL2 from BP only, and only if they have enabled that RIM, and with a lowered speed.

You can get ADSL1 from any supplier on a RIM or direct to the exchange. The only exception to this is that Optus has now stated that they may not support new apps on telstra only equipment.

In short:
Cause: Council approvals, Developer interested in cheapest options, Telsra playing politics (they want FTTN/FTTH as they then cut out all competition)
Solution: Speak with local council to prevent re-occurance, speak with local member, Telsra partition, organise a group to go to a competition ISP (node, TPG, Optus, iinet) to get a new DSLAM installed.

When you do get connected, look at all your options. There are ISPs that do not charge as much as telstra.