I believe this is the situation.
From 1 July 2007 there will be an Office of Airspace Policy (OAP) in DoTRS, and an Office of Airspace Regulation (OAR) in CASA (takes over AERU role).
OAP responsibility is government policy on airspace matters. OAR responsibility will be to investigate changes to airspace architecture to ensure safety and cost benefit. OAR also has responsibility for regulatory aspects related to airspace i.e. declaration of permanent and temporary airspace.
For something like class E over class D for example, OAP will tell OAR to conduct an investigation as to where or if implementation would be appropriate. OAR conduct the investigation, seek input from affected parties including ASA and industry, and determin where or if at all implementation is appropriate, safe and has a demonstratable cost benefit, and provide a response to OAP. If the decision is made to go ahead somewhere, OAP will instruct ASA to implement it.
Theoretically after 1 July ASA's role reverts to simply being the air traffic service provider, and after the above processes are finishedthey are told what to implement and where.