Hi Goosewisper,
The recessed deck is a good way to keep the traditional building style while retaining the northern exposure for winter heat. Keeps the footprint reasonable and therefore cost down. I'm sure it will evolve further yet as your ideas keep coming.
Not a detail you have to pin down yet, but check your eave overhang on the north to get the appropriate amount of heat in during winter (will depend very much on the window heights). They may be a bit too much as drawn.
As you haven't shown all the windows it is hard to get an idea of the cross flow for air or sun exposure. A short stub wall/privacy screen on the east end on the balcony (cnr of dining room) will assist in protecting the area outside the dining windows from the wind and making it low pressure to suck air out of the house via the dining room windows (during summer). If you haven't already it is worth standing around on your block for a while to get an idea of the summer wind direction would be useful. You can get a lot of local variation due to topography and other structures. For example our summer breeze here is SW, but yet I get a lot of air coming in through an east facing door. This is because the wind tunnels down our street (N/S), hits the side of our house and then into the east facing door that is set back. This is combined with a lot of north facing windows to suck the air out of the house. Depending on wind direction, you may even choose to skew the house on the block a bit one way or the other to assist (say (10-20 degrees). Even plantings can assist in deflecting wind to assist in summer.
Some thoughts which are more about likability and aesthetics which will vary person to person....
It might be worth having the wall between the passage and the bedrooms mostly glass, will make a narrow passage feel bright and airy and you walk out of the bedrooms to the glorious view! 
Bedrooms are a bit small at 3x3m particular for a master. Built in wardrobe size if fine for a single, but I suspect a couple would struggle with wardrobe space. I suggest you draw some furniture, any additional storage, etc in. Equally add you kitchen appliances, washing machine, add some detail to your bathroom. Do two of you brush your teeth together? Is there room for this? Can you fit all your linen, spare blackest, vacuum cleaners, mops, etc somewhere? Think about storage space, do you have enough for all your possession? I assume you will have a shed or something that can be used for long term storage and various other bits and pieces. I have lived on a yacht for long periods and it is amazing how small a space you actually need to live in, but it needs to be thought out very carefully so that everything has a home and spaces don't feel cramped/cluttered.
I think the living area is Potentially space challenged (depending on chosen furniture styles and sizes). It is roughly equivalent to a reasonable one bed apartment living area (I.e. totally liveable, but a smallish area suited to 1-2 people). After taking the thorofares out the dining and lounge are both ~3x3m. (e.g. On your drawing you have crammed your opposing sofas together such that there is only a 1m gap. A 2m gap is perhaps more realistic). As already discussed your kitchen is also very tight.
Can you use your existing house to pace things out a bit? Go to friends places where you feel they have comfortable size rooms and kitchens and measure them out. (When we were building I would get quizzical looks from my friends as I paced out their lounge, bedroom, etc!). The other thing I did was use some string and lay a room out, add furniture and check how things flowed and fitted. A well laid out small space can work very well, but the layout and flow becomes critical. It is much harder to design something small rather than something big. On a yacht everything is built in which greatly reduces the required space. That would be a bit restrictive for a house, but good furniture selection and layout can make the spaces feel bigger than they are.
Do a Google search on some european house designs. They have some great ideas for effective use of space.
As KW said a A table may be too low to use standing for food preparation (bad on your back and shoulders). Work height for standing is 900mm (kitchen bench) and for sitting is ~700mm. One idea I have seen is a kitchen island bench that then drops 200mm on the end to make a dining table that is built in. Great space saver!
Without allowing for your budget constraints, the obvious suggestion is to extend the house out to the east by 1-2 metres. This might also allow you to arrange your furniture differently and enable the lounge to be opened fully to the deck making it a combined living area in summer. A metre extended to the north would also be a bonus, but again $$. If it is a long term home, then in my mind livability becomes very important (in 10 years time you won't remember the cost difference, but you will still have a small living area). If it is only a stepping stone to something else, then budget will be more important. We have been living in our extension now for 6 months. In hindsight some of our better decisions were those where we we ignored economic common sense and went with the liveability, but we were lucky and had the freedom to make those choices.
I hope that is useful. As I tell lots of people listen to the advice, then throw it all out and make up your own mind! However I am sure you will end up with a great house at the end of the day.
Cheers.
Posted Thursday 15 Jan 2015 @ 1:24:07 am from IP
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It's Norfolk Island. Latitude's closer to coffs harbour and tempered further by the ocean. Does this change your opinion the sketch?
