State of Australia when obsession follows start of Test (8)
I believe the answer is:
tasmania
'state of australia' is the definition.
(I've seen this before)
'when obsession follows start of test' is the wordplay.
'when' becomes 'as'.
'obsession' becomes 'mania' (I've seen this before).
'follows' is a charade indicator (letters next to each other).
'start of' says to take the initial letters.
The first letter of 'test' is 't'.
'as'+'mania'='asmania'
'asmania' after 't' is 'TASMANIA'.
(Other definitions for tasmania that I've seen before include "somewhere in Antipodes?" , "Van Diemen's Land" , "Aussie's state" , "Pacific island" , "Pacific isle" .)