The style of mens swimming costume which covers the bottom and forms a pouch at the front, as worn in surf lifesaving and in swimming races. Used jokingly with an oblique reference to a mans genitals.
2006: and who could forget his exhibitionism when he stepped out of the sea this week in a pair of swimmers referred to universally as budgie-smugglers. — Daniel Hoare, Australian Broadcasting Commission, The World Today program, 24 November 2006, reporting on the Victorian state election [ (and see SMH [ picture, at right] of Baillieu in the garment in question)
Wikipedia foundation.