The Petrov Affair, which happened in 1954, was important because it led to the breaking of diplomatic relations between the Soviet Union and Australia and because it moved Australia much more firmly towards anti-communism.
Before the Petrov Affair, there was controversy within Australia as to how to respond to communism. Robert Menzies, then the Prime Minister, had tried to outlaw the Communist Party but had been overruled by the High Court and had lost in a referendum on the issue. This vote was extremely close, showing that there was a great deal of public sentiment on each side of the issue.
When the Petrov Affair happened, the dynamic changed and Australia became much more anti-communist for some years to come. This is seen most clearly in the fact that diplomatic relations between the two countries were severed and were not restored at all for five years.
It also created suspicion of other people. Petrov HAD been a spy. Who knew who else could be?