Spice do not think it makes Aussie government look bad. Rather the opposite. They are seen as taking a stand to enforce the rules they have in place against someone who, arrogantly, seems to think that they can be an exception.
Obviously, visa should never have been granted in first place, but probably his legal team worded that application carefully enough to cover the truth.
Do wonder how he will be received when (as he says he intends to do), he comes for Wimbledon later this year. He would fit in very well with UK government with his lies, etc.