Australian island state (8)
I believe the answer is:
tasmania
'australian island state' is the definition.
(I've seen this before)
This is all the clue.
(Other definitions for tasmania that I've seen before include "Van Diemen's Land" , "Pacific isle" , "Aussie's state" , "somewhere in Antipodes?" , "Island state off SE Australia, capital Hobart" .)