There are plenty of websites around (I used Join My Band, but that's a UK website) where you can place an ad to search for band members. You should check for Australia-based ones. I found most of my band members through the Join My Band website I mentioned.
The cheapest way I can think of is to download a free recording program, such as Audacity
(it's free). Once you have done so, buy a lead that can connect your guitar amp to your PC/computer (never
place a microphone next to your amp and play it in that way, as the sound quality will turn out to be horrid). Then, when it's all hooked up, start recording. Repeat for any other instruments. Use a microphone to record vocals.
Drums can be a pain. I recommend you either use an electric drum kit, as they are great for computed recordings, or plug a keyboard in and use the drum kit sounds on the keyboard (most keyboards have them). You could download a drum software on your computer, but they're usually quite expensive.
Unfortunately, I don't really know a whole lot about doing this kind of thing cheaply. I was very lucky myself as, in my first year of University, I met a guy who wants to enter the producing and management business in music. He has some really expensive equipment that I, and later my whole band, use to record our music for very good demo-quality recordings.
Anyway, since this is primarily a music-based thread, I'll move this to the Music forum.
Sig and avatar by Ozzo. Thanks.