"....I live in the ACT and when having it inspected today was told that the wheels are the wrong offset and hence failed the inspection...."
BTDT.. several times.. but not with wheel offset.
Based on my experiences, I would suggest that incorrect wheel offset may not be the real problem. Did they actually take the wheel off the car and measure it? You may have a wheel problem..or maybe just the wrong tyres.
I'd take a bet they just looked at the car and decided that the tyre sidewall pokes out a bit past the edge of the flair.... probably like pretty much 90(+)% of Canberra Minis.
In the absence of photos or any other info we're doing a lot of "supposing" here, however...
Originally MK I Ss were designed to wear 145 tyres ... and even these were pretty marginal. So much so that SA demanded that all Ss would be fitted with wheel arch extensions (which became standard on all Ss when the MKII was released). When we upgraded to 165 tyres the margin became even more marginal

IMHO you have two options. Get a copy of the regulations and argue that their interpretation is incorrect. (I have been successful with this approach). Or (the easiest way) - borrow a set of S wheels (I'll bet there are a few hanging around in the local club - you are a member??), get you paperwork done then revert to your original set up.
Cheers, Ian