Neither was feeding at the time. My recollection is that they were both sitting tight on bare drooping branchlets of an essentially dead small tree, I think posssibly a eucalypt, but I didn't pay much attention.
Some of the caterpillars of Lasicampidae are hairy like that, and have a pair of tufts behind the thorax and one on the tail, like http://lepidoptera.butterflyhouse.com.au/lasi/pusilla.html