If investors started to worry about the size of the Australian Government deficit and demand for federal public debt fell

the rise in interest rates (yields) would reflect the desire of the Government to have higher interest rates.
the rise in interest rates (yields) would reflect the fact that the deficits were drawing on scarce private savings and increasing competition for them.
the rise in interest rates (yields) would require the Government to reduce net spending.

Answer: the rise in interest rates (yields) would reflect the desire of the Government to have higher interest rates.

Please read Will we really pay higher interest rates? for further material or post a comment if you want further explanation.