No. You must be outside Australia ,You must depart Australia for your visa to be granted and evidenced in your passport. You do not need to return to the country where the application was lodged as this can be done at any Australia overseas mission.
You will need to meet the requirements for that class of visa, which may include the requirement that you only intend a holiday or short visit. Visitors visas are not intended to provide residence in Australia for migration applicants awaiting the outcome of their application.
…and you must inform us if you are temporarily in Australia as we can continue your processing whilst you are there.
Yes. If you are in Australia temporarily you can approach an office of the Department of Immigration and Multicultural and Indigenous Affairs to collect the medical forms (Form 26 and Form 160) and details on approved doctors and radiologists. You should sent your sealed medical results, marked with your file reference, to this office or to DIAC directly when completed.
Passports are NOT required to make a valid application. However, for all temporary residence visa applications (except Retirement visa applications) you should provide your passport with 2 unused visa pages with your application.
If you think that you will need your passport during this time, DO NOT send it with your application. We deal with a large number of visa applications and can not guarantee that we will be able to return your passport to you when you need it.