What's that you say? There's no way an Australian state flag can be a bigger copycat of the Australian national flag than New South Wales? Well then allow me to introduce you to Victoria:
I believe the ratio of Union Jack to Southern Cross may be a bit different than the national, but if it wasn't for that little crown, you would be hard pressed to distinguish the two. Victoria, in case you couldn't guess, is named for Victoria, Queen of Great Britain and Ireland, Empress of India, and sovereign of Canada, New Zealand, South Africa, Egypt, and many, many other places at various points during her reign. When the state that would be Victoria was separated from New South Wales by the British government, it is no surprise the named the new colony after their monarch. The crown on the flag, which was adopted later, was meant to symbolize this connection.
The crown specifically depicts St. Edward's Crown, one of the British crown jewels which is used for coronations and appears on a number of flags and shields (such as the British Indian Ocean Territory). Keeping this connection in mind, I feel like the crown should be retained in a new flag, but the basic template can be discarded.
Luckily (for me), Victoria has a great flag from it's past, the Eureka flag, a banner used in a brief rebellion in 1854:
This flag is not without controversy, but as the rebellion is often credited with bringing universal male suffrage to the colony, it provides a great symbol for democracy and for Australian independence. I think with the addition of the crown, it provides historical background in a way unique to the state:
The only thing I wasn't sure of was whether the blue should continue behind the crown (between the top part of the crown and the red cloth, you should be able to see through it), so I've included that version as well:
I'm a little surprised I've gotten this far into Australian state flags without putting a kangaroo on one. Don't worry though, it's coming. Maybe for Queensland since I just did a monarch themed flag...