Don't worry, mate, if your son didn't do his NS but if he can get a degree back from Australia, he can return to S'pore to look for a job, get one and apply for PR again. I can assure you your son will be granted PR status again. My M'sian colleagues did just that.
What's stated in your application form is mere theory but in practice, it is a different story altogether. This PAP govt likes to use scare tactics.