The problem is the ping time of the servers from UK to Australia its a hell of a distance to travel in terms of data and will add a lot of response time to the initial connection and the responses between pages. This would definitely effect their rankings as Google now takes this into a a factor.
To give you an example of just how slow this will be my site is hosted on a VPS in the UK by Rackspace it uses a CDN as well. UK to UK testing my site is below 1.4sec load time and 0.9secs on a refresh upon testing my site with servers based in the Australia my site becomes 3.4secs which is just far to slow to work with, especially when rankings comes into it.
Content Delivery Network CDN
I know that you said in your comment to your question about CDN being far to expensive but CDN's are not expensive at all, depending on the type of data your client needs transferring most CDN networks such as Amazon, Google, and Rackspace will charge around 7-12p per a Gigabyte. its very cheap and they only get charged what they use. It's incredibly fast and all their content is mirrored over the world and has huge benefits for rankings. Any increase in rankings should be seen as a return of investment if the site is for making money.
Testing The Site in Question
If you want to get a rough idea how fast people will view the site from Australia to the UK then you should use a website such as http://www.webpagetest.org which you can select the broadband speed of the visitor - average speed of users seem to be around around 12mbits - viewed here http://www.netindex.com/download/2,18/Australia/
Just like any website you should always try to locate your server in the home geo location of the targeted GEO location so that the site has fewer hopes to the visitors viewing their site. You are best of getting some good old Australian web host to host their site so they do not feel the pain of the heavy response times due to the sheer amount of server hopes they are having to take to get to the data.