It follows the general Australian pattern of stretching single vowel sounds into diphthongs, or breaking them up into 2 parts Consider for example the Australian pronunciations of 'late' and 'beer'.
This is just an observation but the Australian and some British pronunciations of "no" bear an interesting similarity to the sound of "nij" (no) in some Dutch dialects.
Perhaps the have a common source? Old Saxon?
Or Frisian, or perhaps even... Uh, "Anglic", or whatever the language of the Angles is called?