I need to get a new australian passport. Do I have to leave kunming to do that or is there a service that can do the paper work? thanks.

Call the consulate in Guangzhou for details. You will have to apply in person.

You will need a special ID to fly if you dont have a passport.

Happy Australia Day!
If you look at the relevant websites, they say that you can post your old passport to the consulate in Guangzhou, along with the relevant form and photos that meet their requirements, and a money order from the post office. The consulate does not favour this method, so they will try to persuade you to come in person, in case the form is not correct or the photos are not suitable, not to mention the safety issue of posting your passport.
When I needed a new passport I managed to convince them that I couldn't come in person. I managed to carefully satisfy their requirements. The only snag was that I didn't follow them up by phone regularly enough, naively trusting that they were working on it. That led to problems with the date of my visa expiry. But eventually the consulate posted my new passport back to Kunming, without me going to GZ at all.