I always just assumed that everyone knew that two of the flute riffs in Down Under were deliberate nods to Kookaburra Sits in The Old Gum Tree. (See below for a discussion about assuming everyone knows something.) How bizarre that people have been debating it.
I don’t believe that Men at Work and their producer were unaware of the plagiarism. It’s done so skilfully. The first line of Kookaburra is reproduced in the first riff and the second line, which I think is just a key change (I’m not a muso) variation on the first, is reproduced after a bar separating the two. These are the two most identifiable - flute or otherwise - riffs in the whole song. I don’t think the song would have been anywhere nearly as successful without these particular riffs. Both songs are creepy. The creepy bit about Kookaburra, and the flute in Down Under reproduces it perfectly, is the sing-song-like lilting effect achieved by the last two notes in the first two lines. And the creepiness fits perfectly with Down Under’s creepiness, which is largely achieved by its lyrics. It’s bizarre that so many people think of Down Under as a alternate national anthem, unless you’ve got an especially wry and cynical sense of humour.
It should be noted that there is a different culture now with respect to composition vs arrangement, most likely influenced by the spread of hip-hop. Specifically, in the past, people who wrote the bare bones of the melody were afforded more song-writing credits than in the current situation, where people who arrange or are sampled are more easily given song-writing credits.
(One annoying thing about blogging is sometimes I write things that I learn later to have been totally obvious to everyone else, making myself look like an idiot, or I neglect to write something because I assume it’s obvious. The latter is especially annoying when I’m prescient about something. I’m too flighty to be bothered writing anything that isn’t likely to be an original idea.)