Envoy 606 (Falcon 900) was arriving at Canberra from Sydney and was assigned 7,000 ft on descent on the Wollongong - Canberra track. The pilot had been given a requirement to reach 7,000 ft by 20 DME Canberra due to conflicting traffic and reported at 7,000 ft when 25 NM from Canberra. VH-IEL (Cessna 172) had departed Goulburn for Canberra on a VFR training flight with the student performing all the functions and the instructor engaged in an examining role. The aircraft was outside controlled airspace at 6,500 ft and was tracking via Lake Bathurst. The control area (CTA) step passes through the north eastern corner of Lake Bathurst and is 30 NM from Canberra. However, the reporting point is an island in the centre of the lake and this is 28 NM from Canberra. The student was approaching Lake Bathurst and prepared to contact Canberra Approach to request an airways clearance but for some reason delayed the call until at the CTA boundary. The instructor was allowing the student to conduct his own operation as a test was in progress and although mindful of the requirement to remain outside controlled airspace until obtaining a clearance, he elected to let the situation continue up to the last instant. The instructor was about to instruct the student to make an orbit when the student made contact with air traffic control (ATC). At the time of the call by VH-IEL, ATC observed the aircraft to be 28 NM and Envoy 606 25 NM and therefore considered that a breakdown in separation had occurred. By the time altitudes were checked and VH-IEL positively identified, the aircraft were 5 NM apart and a radar separation standard existed. The tracking tolerances were 4 NM for VFR flight and 1.2 NM for the radar at that distance. The required separation standard was 5 NM by radar or 1,000 ft vertically. To remain in controlled airspace the pilot of Envoy 606 would need to be 9,000 ft at 30 NM. The descent profile of Envoy 606 was steeper than normal due to the requirement to reach 7,000 ft by 20 NM. Significant Factors 1.The student pilot allowed his aircraft to proceed to the CTA boundary before initiating an airways clearance request to ATC. 2.The instructor on VH-IEL allowed his aircraft to penetrate CTA prior to obtaining an airways clearance.