Those people aren't English. They're Australian.
In both these sentences English and Australian are adjectives. A singular noun would have a qualifier in front of it: He's an Australian, and a plural noun usually ends in an s: They're Australians. In the English language, each adjective only has a single form, regardless of number (i.e. whether it's describing a singular or plural word), which is how we distinguish each case.
They're Australian. (adjective)
They're Australians. (noun)
He's Australian. (adjective)
He's an Australian. (noun)
The word English is a bit more complicated (or simple, depending on your point of view) because it doesn't have an associated gender-neutral noun, only Englishman and Englishwoman and their plural forms.
Those people aren't English. (adjective)
Those people aren't Englishmen and Englishwomen. (nouns)
He isn't English. (adjective)
He isn't an Englishman. (noun)
We could use the words British and Britons, however, they refer to any citizen of the United Kingdom including Wales, Scotland and Northern Ireland as well as England.
Those people aren't British. (adjective)
Those people aren't Britons. (noun)
He isn't British. (adjective)
He isn't a Briton. (noun)
The English are all Britons, but not all Britons are English. Australians are neither English nor British!
8"English" and "Australian", in the above sense, are adjectives. However, while the modern (US) noun for someone from England is "Englishman" (at least for a male), the noun for someone from Australia is still "Australian". So you might have two Engishmen and two Australians walk into a bar. – None – 2016-02-07T03:41:40.153
@HotLicks How can I know that in "They're Australian", the "Australian" here is noun or adjective? If it can be both, that mean "They're Australians(plural noun)" is also correct??? – fronthem – 2016-02-07T03:52:29.393
5In "They're Australian" Australian is an adjective. In "They're Australians" Australians is a noun. And in "He's Australian" you have an adjective, while in "He's an Australian" you have a noun. Simple, isn't it!! – None – 2016-02-07T03:55:48.077
You know, in a book about grammar, I'd hope that all of the sentences are grammatically correct! – CJ Dennis – 2016-02-08T00:26:35.930
@CJDennis - It's amazing how often that's not the case. – None – 2016-02-08T00:46:52.260