Jonkster, you are partially right, the problem is not just rules and regulations, it goes deeper than that. The problem is trust and with that goes certainty and predictability. Lack of trust, uncertainty and unpredictable behaviour that goes with it increases business risk. The main conclusion of the Forsyth Review was that the industry does not trust the regulator.
The higher the risk then the higher must be the return to compensate for the higher risk. Hence flying has to cost more, if it happens at all.
As for the RAA, SOAR, SAAA etc. they can be shut down (as has happened before) by CASA at the stroke of a pen. Aviation businesses are not safe investments in Australia hence the industry is dying.