PC: Japanese incursion into Australia in 1942?

Just prior to the fall of Singapore in February 1942, General Yamashita submitted a proposal to invade and occupy Darwin and its surrounds, recognising that air attacks alone, no matter how successful, could not eliminate permanently the threat. This would have employed troops then on their way to Bali and Timor (~20,000) and the land and carrier based aircraft that were presently in the area, against which the allies had no more than a dozen P-40 Kittyhawks, a couple of B-17s and three heavy anti-aircraft guns. Landings in late February 1942 would have built on the disorder and confusion of the collapsing Allied command in Java. Yamashita’s plan called for a force of a division to be landed on the coast near Daly River Station and push inland towards Adelaide River and from there north – a total distance of two hundred kilometres, taking Darwin from the landward side. The coastal conditions were well known to the Japanese; in fact they had better maps of the north of Australia than the Australians had.

Once Darwin was in Japanese hands there would have been no possibility of conducting the air raids on South-East Asia that continually hindered Japanese efforts to get the Indonesian oil industry operational, or exports of other strategic resources from E.S. Asian ports that were obstructed by mines dropped by Australian and American B-17s. Nor would the commando raids that tied down so many Japanese troops in the region, 20,000 in Timor alone, have been possible. Japanese bombers operating from Darwin and Batchelor airfields could have hit any target in Queensland down as far as Brisbane, including the docks in Brisbane and Townsville where vitally important war supplies were being unloaded. In the west they could hit any target down to Exmouth, threatening to sever the air link to India. Such bombers could have operated unescorted and unhindered with no Australian modern fighter aircraft closer than Egypt, no more than twenty American P-40s transiting Australia on their way to Java, and only 17 heavy anti-aircraft guns in the entire country.

Once taken Darwin would have been secure: it could not be attacked from the south and an amphibious invasion would have to come from either the east or west. East would have to brave the narrows of the Torres Straits, where they’d have been sitting ducks to air attack from Darwin and Ambon and would have been well beyond the island hopping operations the allies conducted along the New Guinea coastline. An attack from the west would have been equally beyond the range of Allied air support without first building up a string of new bases along the west coast, or otherwise equally vulnerable to prolonged air attack before approaching Darwin.

Basically, yes; the IJA only ever seriously looked at Darwin, and categorically refused Navy suggestions for a broader invasion.

Also thier supply route will be hounded down by allies submarines, aircraft and surface units.

It would be best used as a way of threatening the Australian government to surrender. It'd be a bluff, and depending how the rest of the war is going the Australians might accede anyway.