I think you're right, that there's pretty good evidence that the number of illegal firearms is considerably higher than 260,000. Roughly 640,000 firearms were handed in, in the first buyback. This covered self-loading longarms and pump-action shotguns. Based on import figures and figures for local production there should have been several million. As well as the SKS/SKK rifles, there were something like 500,000 M1 carbines imported, and with those types alone you have more than the total number of firearms handed in, and you haven't even started on the other centrefire rifles and the numerous shotguns and .22s imported and made here.
Estimates for the total number of illegal firearms range up to 6 million. See for example
LINK FWIW I remember being told by contacts in the plumbing industry that certain sizes of poly pipe and end caps suddenly disappeared off the shelves of suppliers, and remained in very short supply for a while.
Not only were the buybacks a complete failure in getting firearms out of circulation, they actually created a grey market. As well, for the investment of over a billion dollars thus far, and counting, there were no measurable benefits to homicide rates. The decline which had started several years prior to the first buyback continued, unaffected by the buybacks. Interestingly, over the very same time period, the homicide rate in the US also declined steadily - and it declined at a faster rate than did Australia's.
