It's not illegal to fish for sharks, but NSW Fisheries saw it as targeting whites, which are of course protected. I was living at Port Stephens at the time, there was a real buzz about these guys catching whites off stockton beach. A Current Affair aired a story about them and soon after that Fisheries rushed through a rule change seriously limited heavy gear in that area. Pretty sure it included no baits over 200grams, no wire traces. Not sure if the restrictions still stand.
I used to surf Stockton beach a lot, surfed it decidely less after that aired. Prefer to stay on the water these days rather than in it!