First of all, I'm on your side, but I still disagree with:
It is almost impossible for the management to get developers to stop
using F for qualifying their emotions.
If upper management wills it, it's definitely possible.
A swear jar may have to be implemented, one or two employees may have to be let go to be made examples of, and the moral of the rest of the employees may go down as a result for a period of time before it gets any better, but it's definitely possible.
Now, is it worth upsetting the apple cart? That's another question entirely.
My feeling is he does it to get attention.
You may, in fact, be correct, but for all you know, this guy may have just been raised in an environment and a family that penalized swear words.
In any case, be careful what you say to yourself about his underlying purpose, I'm not saying not to do it, but attributing a purpose is a very tricky thing and it may make you dislike him even way more than you do already.
We now have a new employee who while being local (aware of the loose
usage of the F word) keeps saying "no profanity at the work place" at
developer meetings.
However, I do think you should mentor the guy. If he wants his proposals to be taken semi-seriously, he needs to bring them up in private first.
In other words, when I am a new employee somewhere, even for far less controversial proposals, I find it a lot easier to convince multiple people when I discuss the idea with them one-on-one first instead of as a group. So then, by the time, I bring up my proposal in a meeting, I already know everybody (or most) will agree to it because the entire group (or the majority of the group) has already discussed and agreed to it privately.
Also, another technique is to try to convince the individuals that are the easiest to convince first. Not only those individuals may be the easiest to convince, but even if your proposal is a really bad idea, those are the most likely help you refine the idea or convince you diplomatically not to introduce the idea at all.
However, if the new member of your team brings up the idea repeatedly in meetings no matter how many times the idea has been shot down already, then it's possible that he enjoys starting arguments (which is something that you already alluded to earlier with him wanting attention).
In which case, this could be a bad habit of his, and hopefully, you can help him become self-aware of that habit and help him become aware of how destructive that habit could be to his long-term career.
Furthermore, privately you need to take him aside and tell him that even if a swearing employee doesn't care too much about the issue, that if he confronts such an employee either directly in front of others (or indirectly in front of others in a business meeting), that he's unconsciously trying to assert his authority over that person and trying to make him lose face in front of his peers. And as a new employee and a non-manager, he can't be doing that type of stuff. As this will only cause more swearing to happen overall and this will only cause other employees to ostracize the new employee in retaliation.
How can I make this new employee understand that using the F word is ok
(in a non-insulting way)?
I am not familiar with Australian laws, but assuming this is ok with your Australian legal counsel (which I have no idea if it is, or not).
You could just make the troublemaker understand that if you had to choose between one employee worth x amount of Australian dollars to the company and multiple employees worth y amount of Australian dollars to the company, whoever has the biggest worth would probably win out in the end, and the person(s) with the lowest economic impact would most likely be let go because of their lack of cultural fit.
And finally, to drive the point to him. You could ask him how likely some other employer is to hire him as an engineer if he wasn't able to stay at his last company more than a couple of months (but again, only say something like this if it's legal and if your company legal counsel signs off on it, and if management backs up the underlying threat of him potentially losing his job over this issue).