Why are Australia and New Zealand so isolated?

Both in a lucky position! Stay as you are, the rest of the world is on self-destruct.

Speaking as to New Zealand - in some ways yes, but only in a good way - for example we are isolated from many of the worlds problems such as refugees arriving by boat and border disputes. Pollution is also not such a problem (we are a long way from any large population centres), and if there was a nuclear war we would be one of the most likely to survive!