There are heaps of places, but be mindful of traffic - though this time of year should be ok. Busselton is the site of the WA Ironman Triathlon and the course is pretty flat. You can head quite a way along the beach to the north of the town and south. It you get real adventurous, Dunsborough isn't that far away!!
Being full of retirees, I thought heading south from the jetty had quite good cycleways, but it has been a little while since I've been that way.
There is also a really nice hilly road called Sue's Road - turn off about 5km before Busso on the Bussell Highway (Tuart forrest bypass road). It is used by the sand mining trucks, but there aren't too many of those and the road is quite wide with overtaking lanes on all hills. It is flat at the start, then heads into the forrest and all the way (quite hilly) to the highway that runs from Karridale to Nannup. When you hit the T-junction, head right to Karridale through Alexandra Bridge. The start of the road is wide, but it does narrow where the mining trucks don't go. Hit the Bussell highway again, then turn right again and you'll get back to Busso. Probably about 100km round trip, but that is just guessing. The route back is pretty flat.
There are a couple of wineries on the road back to Karridale and also a meadery for something different (very nice honey fruit wines!!).
Can you tell I'm from Bunbury originally and my parents have retired to Augusta?! Kinda know the area pretty well.
The Albany to Perth bike ride last year did Augusta to Margaret River to Busso on the Bussell Highway and road quality wasn't too bad.
Moo...