The "local traffic only" sign is not present in the QLD, NSW, or Australian Road Rules legislation, nor is an explanation of what it means. Councils don't have the power to restrict the use of a road to "local traffic" under the Local Government Act, at least as far as I can understand.
http://www6.austlii.edu.au/cgi-bin/viewdoc/au/legis/vic/consol_act/lga1989182/sch10.html http://www6.austlii.edu.au/cgi-bin/viewdoc/au/legis/vic/consol_act/lga1989182/sch11.html It's not on the page of Road Signs in Australia, although I acknowledge it may be incomplete. https://en.wikipedia.org/wiki/Road_signs_in_Australia It seems to me it's similar to a "No Through Road" sign—merely advisory.
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