Reduce the area of lawn and you reduce the need for water. There are options, which require little or no fertiliser or extra water, and no lawn mower. One is to use mulches. Mulches can cover areas without having any plants, or they can combine with plants. Some mulches such as pine flakes or gravels can be used to form natural pathways.
Mulches are usually very effective in reducing water loss from soil and suppressing weed growth.
For some people in Canberra the ultimate replacement of lawn could be something approaching the lowland native grasslands which were present before European settlement. This native grassland garden could include local native tussock grasses such as Themeda, Danthonia, Poa and Microlaena species. These grasses can be readily established in a mulch such as stable manure, provided invasive exotic grasses such as couch have been removed first. A range of smaller herbs and shrubs could then be introduced between grass tussocks, or even a few terrestrial orchids. One or two eucalypts may be planted into the grassland and bordered by larger native shrubs.