The England team manager said: "Nick Kennedy has taken his first step in Test rugby and it won't be his last. He hasn't been dropped — we have just gone for a different type of player in this match. Nick is, understandably, very disappointed not to be involved.
"We have gone for Tom Palmer, who played well in New Zealand. He is good at the line-out and restarts, has a high work rate and hits rucks and mauls well.
"Simon Shaw has been there and done it before and we want him to do it again coming off the bench — he offers different skills to Nick."
Johnson admitted that the choice at prop was also close.
He added: "Phil Vickery and Matt Stevens are two very good props and we have opted for Phil against Australia.
"He is very fresh and playing well and this is a team picked to beat Australia, who have been rubbing shoulders with the best teams in the game in the Tri-Nations.
"They are going to be battle hardened and it's a really big game for both teams. It wasn't a case of saying job done' after the Islanders match because we have a lot to improve on in certain areas."
England also have the combative Northampton hooker Dylan Hartley waiting in the wings to solve any problems that might arise against a Wallaby side that struggled to defeat Italy 30-20 in Padova.
Johnson opted to retain the back division that impressed in his opening match in charge last Saturday, despite Mathew Tait's return to training.
Vickery and Sheridan are two of only four survivors — along with Nick Easter and Paul Sackey — from the England starting XV that stunned the Wallabies in Marseille 12 months ago.
The two teams will be playing for the Cook Cup, which Australia currently hold following their back-to-back victories over England in June 2006.
Meanwhile, the short period of peace between the Premiership clubs and the RFU has ended with First Divison Rugby joining the 12 elite clubs in opposing plans for a new Championship under the top division.
This would replace the current 16 team League One with a 12-team competition and the RFU are trying to push it through for next season. However, Premiership clubs and the FDR are against the move.
