I think you have your climate zones mixed up. The climate zones are ordered such that 1 is (roughly) the hottest & 8 is (roughly) the coldest. Cities that match each climate zone area are as follows:
1- Darwin, Cairns, Derby
2- Brisbane, Mackay, Coffs Harbour
3- Longreach, Alice Springs
4- Wagga Wagga, Dubbo, Coober Pedy, Kalgoorlie-Boulder
5- Sydney central, Adelaide, Perth
6- Melbourne, Mount Gambier, Albany
7- Canberra, Bathurst, Hobart
8- The peaks of the Snowy Mountains & the Central Plateau
In this respect, it makes sense that the insulation requirements for chilled water pipes are higher in climate zones 1, 2, 3 & 5 than in 4, 6, 7 & 8. This climate-specific insulation imbalance is reversed for heated water pipes (more insulation is needed in zones 4, 6, 7 & 8 than in zones 1, 2, 3 & 5).
Energy efficiency is one reason but preventing condensation is just as important. Condensation inside wall or ceiling cavities is a quick way to have a mould outbreak, causing respiratory problems inside the building plus rotting wooden supports. Preventing condensation within cavities is one of the reasons why at least 50% of a residential building's total roof/ceiling insulation must be installed on the ceiling, not the roof.

