If the NSW government issues digital driver's licence, then why won't AirBnB accept this? NSW Police accepts it, Services NSW accepts it, Australia Post accepts it. I don't have a physical driver's licence but everytime I try to upload a picture on my digital licence, it's REJECTED!
Maybe you could bring up the licence image from the Service NSW site and do a screenshot and send the jpg to Airbnb? That would (absurdly) be a 'photo' of the licence and should satisfy them.