To say that TCAS will save the day is wrong. As was mentioned a lot of less than professional VFR operators don't switch their transponder on. Secondly when was the last time the mode C was verified. If the transponder is incorrect it is more harm than good.
See and avoid between VFR and High performance IFR aircraft has time and time again been shown to be floored as the primary means of separation. If the Transponder is showing incorrect altitude on the VFR and the IFR is busy doing other stuff apart from looking out the window, it is outside radar coverage and the two aircraft are on a different frequency, you better hope Winstuns big sky theory is working.
I say again in Non Radar airspace, for mixing High Performance IFR's with VFR's C airspace is safe, E airspace is less so, for that reason NAS is flawed.
And again I don't work in Australia, so I am not trying to save my C airspace job. But as has been said before there will be more ATC's not less, so the "Controllers Union looking after their memebrs jobs" argument is way off the mark