Hi shellsy,
Is the 2000mm side setback for both levels of a 2 storey dwelling? I know these rules vary for each council, but where I am the side setback for the bottom level is smaller than the setback for upper storeys. It's a bit hard to explain, but there's actually 2 conditions here. First condition is a side setback minimum of 1m (approx), then another condition with the setback on the boundary to a height of 4m, then at 45º inward to the maximum building height (which is 8m). Both conditions have to be met. Kind of hard to picture I guess, but it means that for a bottom storey with a building height of 5m the setback is 1m, for a height of 6m the setback is 2m, while for a height of 8m the setback is 4m. Nothing you can do about easements though.
I see that you're considering a drive through garage, for garage no. 3. If you decide against this I'd then consider moving some of your build behind this garage. By doing this, & maybe by rotating the top storey by 90º, you'd be able to shorten your E & W walls, & lengthen the N & S walls. I know I keep repeating myself, but you do have a very long western wall, & I think orientation is extremely important. See this government site,
http://www.yourhome.gov.au/passive-design/orientation
I'd recommend reading large portions of that site, not just the page on orientation. Tonnes & tonnes of useful info, I'd actually call it the Aussie bible in regards to efficient house design.
In either case, I'd echo the advice I gave AJB, about adding sisalation (Reflective Foil Insulation) to the western wall. It's not just windows that will suffer in western summer sun, walls will suffer to. Sisalation will cut down the radiant heat from the sun (which bulk insulation will not do, it only cuts down convective heat).
I'd also consider sound insulation in the floors in rooms above the garage, to cut down the noise of garage doors opening. If you're in a cool climate you may consider upping bulk insulation here too, if you think a cold garage may effect rooms above it.