Australia Post have confirmed to me that an item I sold is lost (stolen off a truck apparently).They say I should get a refund through eBay since they are the ones who took my money for the label.How do I do this?

I think Aust Post reply is incorrect - even if you paid ebay for the label, ebay pay Aust Post. I would follow up again with Aust Post - quoting the tracking.

Getting money back from Australia Post for lost item that was sent with an eBay label | Selling

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Getting money back from Australia Post for lost item that was sent with an eBay label | Selling | eBay Australia