They lost 9 tests last year
Context matters.
First off, they also beat South Africa, Argentina, Scotland, Wales and England.
Second, they were beset with injuries and lack of availability of key players due to being overseas.
Third, they would have beaten NZ if not for the Reynauld controversy/timewasting. Similarly they lost to full-strength Ireland/France squads, on the road, by a combined 4 points. Include the loss to NZ and that's 3 losses to 3 of the top 4 teams by a combined 6 points. Yes, the point is to win the game, but margin of victory is an indicator of overall performance.
Fourth, if you watched the games you could see they were playing better and improving as the year went on.
Fifth, who cares about the Italy game when it is effectively an Australia XV.
Sixth, who gives you a better chance at winning? The team that lost by 3 points to Ireland, in Ireland, or the team that lost 43-12 to South Africa's B Team?