We live in a small town just outside of Adelaide, a lot of the kids walk/ride to school on their own, starting around age 10.

Personally, if DS1 had a group of friends he could ride with, I'd let him ride (not walk) at age 10. If I was in the suburbs I don't think I'd be so comfortable with this, but being in a rural town it kinda minimises the risk a little and there is more of a community feel about the place, everyone looks out for each other and their kids.