Oh this makes me ashamed to be an Australian. Your question asks for useful political arguments against this filtering and I think unfortunately they have all been laid to rest by the aging generation of politicians.

What happened to freedom of speech?
What ever happened to transparency in government?

Australia is a parliamentary democracy where we elect our officials to do our decision making for us but not this way! And not led by one vocal man - Communications Minister Stephen Conroy. A more old fashioned politician would be hard to find...

He leads the charge - we have a few 'pollies' who are entrenched with the idea that 'freedom of speech' is a less worthy moral cause than 'protecting the children' without regarding the fact that perhaps protecting children is the job of parents and protecting freedom of speech is the job of a democracy.

Stephen Convoy was quoted as saying
"Most Australians acknowledge there is some internet content which is not acceptable in any civilised society," Senator Conroy said.
"It is important that all Australians, particularly young children, are protected from this material."
http://www.news.com.au/technology/government-pushes-forward-with-internet-filtering/story-e6frfro0-1225810826659

So we join with other nanny governments that forget the role of parent and take on the mantle of moral crusader and woe befall all who do not agree.

And Australia is the only country where this is going to go through as legislation! ARGH which naturally becomes extremely hard to change once in place. The public do have concerns about what will be filtered and by whom but the legislation is going ahead without public consultation on those issues. It's not a very democratic process :(
http://news.yahoo.com/s/afp/20091215/wl_asia_afp/australiainternettechnologycensorship

Convoy says that it will be run by an independent body from public complaints and information supplied by reputable international sources. In other words, all behind closed doors without public transparency
http://www.news.com.au/technology/government-pushes-forward-with-internet-filtering/story-e6frfro0-1225810826659

The two main issues I have and most Australians have are the legislative constraint to freedom of information and unregulated censorship and the lack of transparency of government.

And I'm sad that this is happening to my beautifully relaxed and carefree nation.

In my opinion these sorts of filters never really work. The people that want to get to the illegal or obscene content will get to them anyway through a proxy or otherwise. Usually these filters end up only filtering for those who are honest and simply want to use the internet. History has shown that such filters always block sites that are not illegal or obscene and thus block good content.

In the end the internet was created as a free and open medium for people to communicate. When a block occurs people usually just find a way around and eventually discover what they want to in the end. If this will happen why put the filter in place in the first place? Keep the internet open!

Who is gonna do the filtering The taliban ? The Extremist religious ? The corrupt politicians ? Who is going to be put in charge of filtering ? Company who will remove free and legal content so we only have paid and high price content ?

Since they are going to filter and decrease the quality how much lower priced the new Internet fee will be 50% ? 75% ?

In CANADA we fixed the problem by paying a small tax for artist on blank CD/DVD. Surely Canadian can't be smarter then the Australians ?