The report from OAR on Avalon highlights so many anomalies within Australian airspace that this post could be nautical miles in length, for one, the ridiculous RA3 status of restricted airspace around the tin pot little airfield at Point Cook. This place has a terrifying 68,000 movements per year, I do not know how they cope, but keeping those pesky Australian citizens outside of the airspace must help. Perhaps Bankstown and Moorabbin should make similar submissions to CASA OAR.
However sticking to the point, at no stage does CASA OAR recommend Class C airspace. Airservices, on the other hand operates the airspace as if it was Class C, in my view this is because the people running Melbourne ATC Centre (where all the senior management is located) have little-to-zero knowledge about how efficiently airspace can be run by Tower controllers.
Point 1 - CASA OAR asks Airservices (the should word) to propose an airspace plan without Class E airspace. (Which CASA OAR itself recommended some years ago)
Point 2 - CASA OAR recommends that the E airspace become Class D (not C) this would still allow the VFR operations causing the problems, but enable the tower controllers to position that VFR traffic out of the way of arriving and departing IFR traffic.
Point 3 - CASA OAR recommends that Avalon Tower manages the Class D airspace with the use of the Tower Situational Awareness Display (TSAD). This is a perfectly functional display of airborne traffic (and ground if ADS-B is incorporated) which is not able to be used for separation purely because Airservices chooses to install it that way. The system only needs some minor modifications to make it comply with ICAO Annex 10, something it has done with the Essendon installation.
It is Airservices in Melbourne that I believe wants to operate the airspace as Class C. Mainly because that fits in with the uneducated views of the radar-orientated managers at that facility. And unfortunately, as identified by Lead Balloon above, the managers that run CASA OAR (not the staff in the branch) do not want CASA to be responsible for airspace changes. They prefer to simply "approve" whatever Airservices or Defence tell them they want. It is better named the Office of Airspace Rubber-Stamping (OARS)