I’m not familiar with Victoria‘s laws, so these comments are general in nature. The generally accepted view is that whoever caused the need for retention is responsible for the cost of retaining; and in proportion if more than one (such as, for example, if one side cut and one side filled).
At 1.5m that’s likely to be something that could have required Council approval as a change to ground level, and their overall site approval may have included a requirement to retain somewhere. My first stop would be to check with Council whether a condition of their approval was to retain the cut and see if they will take action to enforce (assuming there is such a requirement). Alternatively if they didn’t get Council approval, Council may take action for failure to obtain necessary approvals before undertaking groundwork. That’s a bit of a slow process.
Your other option is to get a lawyer and start the process to seek a court order. Hopefully a simple, strongly worded, demand letter from a lawyer will be enough to get them to move. Clearly stating that the cost of retaining would be a lot cheaper than facing an action for damage caused by subsidence due to their actions is worth pointing out.
On that note, you should take whatever action you can to shore up that wall if the neighbour still refuses to take immediate action. This is called mitigation, and is a general requirement in most situations to ensure further damage is not caused - as you could be held partially liable for these. While that will cost you money, it should be added in to any claim made against your neighbour.