According to a user on the Whirlpool Discussion Forums down under, the reason for the Australian censorship of GTA IV seems quite clean cut. Bear in mind this is just a rumour at this stage, but from the forum the poster claims to say that someone at Take2 made the following over-the-phone statement:
‘Well in regards to what Rockstar have removed for the Australian release, as far as we’re aware there was only one sexually violent cut-scene which Rockstar felt would cause the game to be Refused Classification. Unfortunately we’re not able to go into specifics until after the game has been released but I can tell you that the scene involves a weapon being inserted into an enemies private area during a mission where Niko is taking revenge after one of his close friends was forced into sexual intercourse during his stay in prison.‘
Sounds fair enough to us.