Different states in Australia have different laws on prostitution. Some, like the state of Victoria—where Sam experienced sexual exploitation—have a legalized system, while others, like New South Wales—where Natalie was trafficked—have decriminalized prostitution.
No country, state or city has a system that falls completely and neatly into one category. However, having a legalized system generally means that buying and selling sex, as well as organizing and managing prostitution (e.g. brothel-keeping and sometimes procuring, i.e. pimping) are all legal, but there are laws and regulations specific to the prostitution industry. For example, there may be mandatory health checks or registration for people in prostitution, or ‘zoning’, where street prostitution is allowed in specific areas only. Because of the degree of government oversight and intervention, legalization is sometimes also referred to as regulation. Countries that fall into this category include Germany and the Netherlands.
In decriminalized systems, all of the above are usually also legal, but the difference is that most laws and regulations specific to prostitution have been repealed, and prostitution is expected to be dealt with as any other business under general labor, health and safety laws and regulations. New South Wales in Australia falls into this category, as does New Zealand.
Ultimately, both legalization and decriminalization allow for most activities around prostitution to be legally carried out. Both systems can be contrasted with full criminalization and the Nordic Model. In full criminalization countries, buying and selling sex are illegal, i.e. the prostituted, buyers and traffickers are all penalized. In Nordic model  countries, buyers and traffickers are criminalized, and people in prostitution are provided with exit strategies and support services, not criminal records.
For information on the repercussions of legalized and/or decriminalized systems, see:
When Prostitution Becomes State Business 
Does Legalizing Prostitution Protect Women and Girls? 
Demand Change: Understanding the Nordic Approach to Prostitution  (CATW Australia 2013)