If a replacement for lawn is desired, then use a planting of suitable groundcovers. A green groundcover is better value than mulching in the long term.
Water Demanding and Shade Tolerant
Gastrolobium latifolium ‘flat’*
Dampiera diversifolia*
Dichondra repens*
Selliera radicans*
Scaevola striata “Blue”
Scaevola striata “Pink Perfection”
Viola hederacea
Legend:
* Can tolerate walking traffic occasionally