Italy coach Marcello Lippi says he was always confident his side would beat Australia even after Marco Materazzi was sent off early in the second half.
"I was never worried because there was still extra time to play and penalties," said Lippi after Francesco Totti's late penalty secured a 1-0 win.
Lippi added: "This was a game that really had everything.
"In the first half, we didn't allow even one shot on goal - in the second, we struggled but we gave away little."
Totti's penalty was the very last kick of the match and the Roma playmaker believes Italy can go far in the tournament.
"So far the critics have really laid into me, but I've always said I'd prove myself on the pitch," said Totti.
"We suffered for long periods of the match, but in the end it was the whole team that won this match because Australia were a strong side.
"Now I think we can go a long way in this tournament.
"The important thing when we went down to 10 men was to keep our heads."
In the quarter-finals Italy will meet the winner of the game between Switzerland and Ukraine.