As a long time resident of the Yorke Peninsula, I can tell you with authority that it is a farmers, countrypersons, way of saying hello. It is nothing to do with the general use of a finger!!! in the city. They use it in the same way as they doff their hats in the street, an acknowledgement, in a friendly way, that you are there.
It took me some time to get used to, but if I drove past a neighbour, without lifting my hand slightly, my husband tells me I was considered very rude. Like walking past someone you know in the street. I think the use of a single finger is just a lazy form of lifting your hand while still holding the steering wheel. Just lift your hand when you pass, if they don't respond, they have the problem.