If you have a digging problem with your Australian terrier and need to modify his behavior the first step is trying to find out the source of your dog's digging. With most terrier breeds, digging is an instinct but can also be learned behavior. Some of the many other reasons your Australian terrier may dig include

Some terriers enjoy digging because it is a stimulating, fun exercise with lots of different smells, a place to bury their treats and bones for later, or because you placed blood or bone meal on your garden and the scent is irresistible to your dog.

Terriers often dig from separation anxiety and because they are lonely or bored. They may dig for something to do, try to escape and meet with other dogs or people, or find somewhere more interesting. Most terriers left any length of time in the yard find it very lonely and boring.
If your dog is not neutered, he may dig to escape, looking for another dog to mate with and the same applies to a female dog that the owner has not spayed.

In order to stop or modify your Australian terrier's digging behavior, you should do things to prevent digging and teach your dog what is acceptable. Have your pet spayed or neutered if you are not going to breed the dog. In the end, this could prevent several other problems in addition to digging. Take him for a couple of brisk walks daily, play with him in the yard, or supply your pet with lots of interactive toys and chew toys.

If you have a large yard, you may want to consider giving your Australian terrier a small, specific area to dig in or even build him a doggie sand box and then train him using treats and praise. Never lose patience or shout and holler at your dog. Choose a place in a shaded area and, if using the ground to dig, add sand, because it makes cleaning your dog far easier.

Once you have your dogs sand box or digging area ready, it is time to modify your Australian terriers digging behavior. Bury a toy or his favorite treat, lead him over to the appropriate area and say 'dig'. For a terrier with a natural digging instinct, this starts to modify his behavior by showing him where you allow him to dig. Make a big fuss and give him lots of praise when he digs up the treat or toy. Repeat this exercise until it becomes second nature to him to dig there. It may take a while to train him but always remain patient. If you do find him starting to dig in another area, tell him 'no', take him back to his dog sand box or digging area and say 'dig'.

There are several commercial products available to deter your pet from digging in certain areas by creating a scent that your dog dislikes. You can also try putting diluted ammonia or pepper on inappropriate areas. Modifying your Australian terriers digging behavior is possible but you need to be consistent in training.