Of course if Australia win do they host next year
Yes, but they'll have to do it from somewhere in Europe.
We don't really have the competitive audition process that some of the Europeans go through.
Just for reference, here's how the Swedish selection works:
1a. Songwriters submit their entries to a jury, that makes a selection (they select 35-40 songs).
1b-i. The public (i.e. songwriters that haven't had a breakthrough yet) submit their entries in a separate competition on the internet.
1b-ii: The public (i.e. anyone with an internet connection and enough interest to actually care) get to vote on these songs.
1b-iii: The winner of the online competition is added to the jury's selection of the songwriters' songs.
2a. The songs selected by the jury + the winner of the online competition are divided into four semi-finals, which are hosted in different cities around the country. The points in the semi-finals and the final are split 50/50 between viewer votes and international jury groups. The international jury groups awards points just like in the ESC (1 to 12) while the points from the viewers are proportional to the votes (so if 20% voted on a song, it gets 20% of the viewers' points, somewhere around 200 - 250 points, depending on how many international jury groups there are).
2b. In each semi-final, two songs qualify for the national final, two songs qualify for a "second chance" and the remaining 4-6 songs are eliminated from the competition.
2c. After all the semi-finals have been held, it's time for the "second chance". Each song that missed the final but qualified for the "second chance" will "battle" against another song that qualified. The winner (i.e. the song that gets the most votes from the viewers) will "battle" again against one of the other winners etc. until only two songs remain. These two songs qualify to the national final.
3. The final. The ten qualifying songs compete for the title. The winner gets to represent Sweden in the ESC.