The Israeli government is supposed to be a close ally of Australia, but has no respect, and shows absolute contempt for friends and foe alike. Australians will not put up with this treachery, and there is no reason why Jewish Australians (or anyone for that matter) need to have two passports. Use the passport of your chosen country of residence, and lose the bonus one.
Death toll from car bombs in Iraq rises to 56 (AP)
from the article: Report: Mossad used Australian passports before Dubai row