Thee were a couple of cool hostels I stayed in last year (went the end of May too). One was Trekkers
This place is a bit outside Surfer's Paradise, but it is a nice little hostel....like a big house, really. You have to take a shuttle or a bus into Surfer's but the hostel is worth it, IMHO. People staying in-town at Surfer's had some really scuzy options. Take a surf lesson in Surfer's. The town is a big time party place.
Another place I liked was On the Wallaby
It is this little hostel up in the Atherton Tablelands outside of Cairns. We stayed there by chance, as it was part of a two day tour we did, but the place was awesome. It's out in the boonies, but they do things like canoe trips, platypus spotting trips, etc. This hippy guy named Wayne manages the trips and hangs out in the hostel and he is an awesome guy. The hostel was really clean, but small and very friendly. At night these people were doing fire dancing and using a didgeridoo (sp?) Just an awesome, off the beaten path kind of place. highly recommend it. Have an awesome time...australia is prob one of the best trips I have ever done.