Domestic travel within Australia
Airlines must compensate you for lost luggage under the Civil Aviation (Carriers' Liability) Act 1959 or complementary state legislation. Airline liability for loss or damage is limited to $1,600 per passenger for checked luggage and $160 per passenger for your carry-on.
International travel
Airlines are governed by two international treaties: the Warsaw Convention of 1929 and the Montreal Convention of 1999:
Where the Montreal Convention applies, airlines are liable for up to 1,131 Special Drawing Rights (SDRs) per passenger – a form of international money, created by the International Monetary Fund, equivalent to approximately $1,735. That's the total amount you could receive for both checked and carry-on baggage.
Under the Warsaw Convention for international travel, airlines are liable for up to 250 francs (about AUD$30) for each kilo of your checked baggage or 5,000 francs (about AUD$600) for your carry-on baggage.