How does Australia stay afloat?

Please forgive me if this is a common question. Australia is thousands of kilometres away from other economic hubs like America, Europe and Asia. Imported goods cost much more due to shipping costs. Labour costs are therefore much higher to cover these costs. They (we) manufacture very little, and what is made costs much more to export elsewhere because of said labour and shipping costs. How does Australia remain viable in the world economy? And I guess therefore any geographically isolated nation?