I think we will have to disagree about the need to tow a buoy or flag. It is just not going to happen here, or anywhere else in Sydney. In addition, yes, laws within Australia relating to this are controlled by state governments. One of the later posts also appears to quote an Australian government law which would only apply in Australian territories or outside state waters.
I hooked the anchor back on the chain and then took it under a large overhang and wrapped the chain around a large horizontal rock.
We later observed the boat attempting to free its anchor and then break the rope. Numerous people saw what happened and all agreed with what I did.