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Why is my LED light flickering using 4061PDL?

The reason why is because the LED on the switch is running in series so essentially they are fighting for 240V.
This can be over come by two solutions. The first be running a neutral to the switch. The second, placing a load correction capacitor (31CAP) across the load.
 

 
See attached PDF's for wiring diagrams.
 
For further information on the load correction capacitor please visit http://www.clipsal.com/Trade/Products/ProductDetail?catno=31CAP 
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