Green’s Dictionary of Slang

(Aus.) eccentricity, insanity; thus have white ants (in the billy / the attic), to be crazy.

[1895		N. Qld Register (Townsville, Qld) 24 Apr. 3/2: Columns have been written in description of the ravages of white ants — ‘termites’ [...] They eat wood and they attack men, for who has not heard the remark, ‘old Bill Jackson won’t last long, the white ants have got into him’].
1895		Indianapolis Jrnl 30 June 14/4: To have white ants (a Queensland phrase) [means] ‘wrong in the head’’.
1900–10		Stephens & O’Brien Materials for a Dict. of Aus. Sl. [unpub. ms.] 166: WHITE ANTS: silliness, madness.
1904		Sun. Times (Perth) 3 July 4/7: The progression, or retrogression, of the ordinary dog-and-damper fed, shy poo saturated citizen of Mulga-land to ‘white ants’ is by uneasy stage [...] Last scene of all [...] His only friends the mulga scrub that he talks to, his only food gohannas he weeps over as he wolfs them, his hat a billy lid, and on his frayed-out boots pieces of tin to keep the ants from getting to his garret.
1906		Sun. Times (Perth) 28 Oct. 4/8: Twenty-five balmy blokes — with white ants and grievances.
1930		Windsor and Richmond Gaz. (NSW) 14 Nov. 6/4: ‘Whoever the reporter was he must have been suffering with “white ants in his attic!”’.
1936		Queenslander (Brisbane) 2 Apr. 2/4: ‘Yes,’ said the boss, regarding the supposed looney with pity [...] ‘White ants,’ explained the boss to his visitors. ‘Poor devil!’.
1938		H. Drake-Brockman Men Without Wives Ii i: lulu: What’s up with Clara? mrs. bates: (sighing) Attack er white ants.
1945		Baker Aus. Lang. 89: To have kangaroos in one’s top paddock and to have the white ants, to be silly or mad.
1951		E. Hill Territory 446: White ants in the billy: Crazy.
2003		Jennifer ‘Australian Sl. Phrases’ Jennifer’s Jibberish 🌐 white ants in the billy ...... crazy.