An offence under s 47 Crimes Act can be committed either with or in the presence of a child under 16. An accused doesn't need to engage in physical contact with the victim to commit an indecent act in the presence of a child prohibited by s 47 : R v Coffey (2003) 6 VR 543. The Court of Appeal affirmed the correctness of Coffey in Savage v The Queen  VSCA 220 last year.
What constitutes indecency is a decision for the trier of fact. The term doesn't have a fixed or exclusive meaning. The standard to be applied is the ordinary standards of the community: R v Papamitrou  VSCA 12 [at 45]. The appellant asserted that the jury couldn't have found indecency because there could be nothing indecent, 'in two teenagers of essentially the same age kissing each other'.
Maxwell P, Weinberg and Harper JJA [at 13],
We disagree. The indecency resides not in the act of kissing but in the instigation of the act by a 24 year old man for his own sexual gratification. The question of indecency was for the jury to decide. In the circumstances, it was well open to the jury to be satisfied that the applicant’s conduct in this respect was of a kind which ‘right minded persons would consider to be contrary to community standards of decency’. It is hardly surprising that defence counsel did not contest this point before the jury.
I'd say the flaw in the appellant's argument is that he sought to focus on the actions of the girls and have it considered independently from his own conduct. There are probably many cases where the activity of a child would not be considered indecent if the accused person was not involved in it.
Edit: An example is the decision of the NSW Court of Criminal Appeal in R v McIntosh (Unreported, Loveday AJ, 26 September 1994) which was cited with approval by James J in DPP v Eades  NSWSC 1352.