VH-WNI departed Wagga for Canberra with a clearance to maintain 4000 feet visual due to VH-PVX inbound to Wagga on a reciprocal track at 6500 feet. The pilot of VH-PVX called at three miles west of Tumut (approximately the CTA boundary) at 6500 feet. She was later issued with a clearance to descend to 4500 feet. The clearance was read back correctly and mutual traffic was passed to both aircraft. Later, VH-WNI reported crossing the Hume Highway. VH-PVX was then asked to report distance to run to the Hume Highway and altitude. The pilot responded "two miles to run and leaving 4300 feet on climb". The two aircraft would have been passing at that time with less than 500 feet vertical separation. Later, when VH-PVX was approaching at Wagga, the pilot was instructed to descend to 2500 feet and overfly for a right circuit runway 23. This was to maintain separation with other circuit traffic. VH-PVX was observed approachng the aerodrome from the east and in response to a request from air traffic control, the pilot reported her altitude as 2000 feet. She was instructed to climb back to 2500 feet.