If the paper discharge was never lodged and registered at the titles office then it would still be on title currently. In NSW, paper discharges of mortgage can no longer be lodged as a standalone document (over the counter).
My thinking would be to go with the latter suggestion in your post - invite ANZ into your transfer workspace as Mortgagee on Title, they would then create the discharge of mortgage themselves (in addition to the consent document) and you would create the transfer. Once they are in your workspace, you could also send them a conversation to clarify if there are any other documents they require in order to provide the discharge of mortgage in PEXA (I.E they need the paper discharge uploaded/sent to them).
I hope this helps, please let me know if you require any further clarification.