From here
In American English, yes. But Standard English (including Australian English) traditionally spells it as "gaol." Some of us evidently still like to keep our English un-Americanised. ;)
But I personally prefer...
* Programme instead of program (unless I'm talking about software)
* Mould instead of mold
* licence instead of license (unless I'm using it as a verb)
* practise instead of practice (unless I'm using it as a noun)
* Latin based ~ise ending instead of Greek based ~ize ending (e.g. recognise, Americanise, theorise etc.)
* I only use the word "ass" if I'm talking about a donkey; if I'm talking about buttocks I use the word the word "sparse" minus the first two letters. ;)
* premiere instead of premier (unless I'm talking about a head of state)
* parlour instead of parlor
Just for fun: How Australian is your English? (quiz game) ;)