There's actually several mechanisms by which it could be banned under Australian law, if they really do consider it a security threat. Practically speaking, there are very few things the government is not legally allowed to censor in Australia.
They could require ISPs to block access to the servers, as they've done (poorly) for a range of websites.
They could classify TikTok as entertainment, and then it give it the dreaded "Refused Classification", making it illegal to distribute or make use of.
They could ban it under the Australian Customs Act, forcing places like Google Play to remove it from their stores, as they've done for a wide variety of books, and other media.
That's true. Following the Christchurch shootings, Telstra pre-emptively blocked 4chan, 8chan, Zero Hedge, Liveleak and others. (Vodaphone and Optus had similar blocks with slightly differing lists of sites they put in place after Telstra had enacted theirs).
They did later lift some of those blocks after everyone stopped sharing the video of the shootings, but not all of them. (And if the government ordered blocks on some of those, I actually would be fairly comfortable with it, if it were done with process and transparency.)
This isn't a judgement of whether their actions were morally right or wrong. However, an ISP should probably be pre-emptively calling MPs to make a decision, rather than controlling access directly.
They could require ISPs to block access to the servers, as they've done (poorly) for a range of websites.
They could classify TikTok as entertainment, and then it give it the dreaded "Refused Classification", making it illegal to distribute or make use of.
They could ban it under the Australian Customs Act, forcing places like Google Play to remove it from their stores, as they've done for a wide variety of books, and other media.