"A thinning layer” (Australian joke) (5)
I believe the answer is:
ozone
'a thinning layer' is the definition.
(I've seen this in another clue)
'australian joke' is the wordplay.
'australian' becomes 'Oz' (nickname for Australia).
'joke' becomes 'one' (as in 'that's a good one!').
'oz'+'one'='OZONE'
(Other definitions for ozone that I've seen before include "A poisonous gas; seaside air" , "Atmospheric layer in some danger" , "It's said to brace" , "(Depleted) layer of gas" , "Condensed oxygen; sea air" .)