From her caddie Dean Herden:
"The reason Jiyai is not playing the Australian Masters is because her schedule will be too full. This year she plans to play a lot on the LPGA as well as in Japan which will calculate to about 33 events. By playing the Australian Masters it would mean she would be playing 5 events in a row; therefore, she would be pretty tired going into the first 3 events on mainland USA in March-April leading into the Nabisco."
Makes sense to me. Whenever you hold membership on multiple major tours, you have to learn how to say "no" and rein in those competitive instincts at times!