If "such medicine" means something that is not approved for use in Oz or prohibited, then it is exactly the same as US customs -- the item is confiscated and destroyed. Actually Australia is a bit better than that, for many items that cannot be imported without paperwork you have the option of re-exporting the item at your cost (which is rarely cost effective). Declaring has the feature that you are immunized from prosecution if you happen to have something that is prosecutable (which has happened with experimental cancer treatments, for example).