A CFD is essentially a forward and thus also a derivative. There are two main differences to forwards:

First, you do not trade on the forward price for some fixed date but have some kind of "rolling" mechanism. I.e. you enter your position based on the the current spot price. If you close out your position within the same day, you just receive the difference between the final and initial spot price. If you hold it over night, then you pay / receive the one day financing cost on the strike (long / short position). I.e. if you close out after one day, you essentially held a one day forward contract and so on.

Second, there is a daily marking to market. For forwards, you don't have any cash flows between the initial date and the maturity. CFDs are, similar to futures, marked to market on a daily basis. Whenever your margin account breaches some minimum maintenance margin level (usually even intraday), your position will be liquidated on the spot.

Both differences do not change the nature of the contract and are rather settlement and marking-to-market issues. Thus, since a forward is a derivative, such is a CFD.

This description of CFDs applies to the terms offered in the European market - but I guess there are no significant differences in Australia.