I'm in the U.S., so I'm not familiar with any cultural practices unique to Australia, such as "schoolies."
My parents allowed me to go camping with friends as a teen, and I would do the same with my kids if they are trustworthy at that age. Assuming they are legally adults (I think someone verified that's 18 in another thread), there's not much you can do about it if they choose to go. I mean, if they still live with you, I guess you can give ultimatums and hope for the best.
But if they are minors, and you don't feel comfortable with their judgment, their friends, or the event, then I think it is worth saying no. There is just so much that can happen in a situation where a lot of people are inebriated for a long time. Most rapes occur when alcohol is involved, for example. The chances of someone engaging in dangerous behavior (due to prolonged intoxication or drunk peer pressure) is high... such as driving, swimming, diving into a pool, alcohol poisoning, etc. It's not the best environment for novice drinkers, you know?
Personally, if I became aware of underage drinking or drug use (or had a compelling reason to suspect it), I'd report the whole thing to police. But over here, the legal drinking age is 21, so there's less opportunity for legal binge-drinking in recent high school graduates. Regardless of how I feel about it, I expect my kids to behave within the law. So that would be another preventive measure, in my opinion (if my kids absolutely insisted on going and I didn't).