I think the regional areas need to be vastly improved for both population and economy. I would do this by flooding Lake Torrens and Lake Eyre with sea water, and create a new lake in the Strzelecki desert to Innamincka (enormous) and connected to Lake Eyre. This area is the lowest part of the Australian continent, and anyone who knows anything about geography knows that low or below sea level elevations are far hotter, so this area is the heat sink that starts a lot of heatwaves in summer. Filling it with water would help reduce summer heat, and increase precipitation throughout the East. Not too mention throw in some desalination plants and farming would thrive.
Then I'd build a mid tier city on its shores on the eastern side around the same level as Brisbane and connect it to Brisbane via a new highway and rail. I think this would open up inland Australia to further settlement, instead of just driving inland to the dead heart you'd be driving to a new inland sea with cities and infrastructure. This would lead to further development of the regions between these two areas.
Second Mid tier city would be Karumba on the coast of the Gulf of Carpentaria, this is an extremely important port being much more accessible for ships instead of coming through the treacherous GBR. Although it gets very hot here, hopefully future technology can deal with it. But yes turn Karumba into a major city and connect it with a better highway and rail to Cairns and again to Darwin.
Third mid tier city, flood Lake Macleod in WA and deepen it to become a bay, use excess material to create an artificial mountain of 1-2km high using water and pump systems. Move West Coast Navy Base to the new port and build a new city around it. Inland the desert plains there are dry (except for cyclones) but the soil is very rich. Using irrigation, the Gascoyne Valley would become Australia's version of California and a major food bowl of the nation.
(Oat crop in Pilbara)
And of course 2 new cities one on Lake Alexandrina, and another on the newly flooded Lake Torrens.