Don't know anything about flying in oz, but if you're talking about the concept of PPL holders instructing I know a bit about it as I did it in the UK.
Here, prior to 1988 it was possible to have an instructor rating issued on a PPL and be paid for instructing provided that both the instructor and student were members of the same flying club. Prior to obtaining the instructor rating you needed 200 hours total and 150 PIC plus an IMC rating ( the UK mini-IR which allows flight in IMC outside of class A airspace ).
Rather than prevent people making a career in flight instruction it actually helped to encourage it, as if that was all you wanted to do there was no need to go through the pain and expense of obtaining a CPL - and after all a good instructor on a light aircraft requires sound handling skills and teaching ability, not a knowledge of gas turbine engines, polar stereographic charts and arcane aspects of air law ( such as the size and colour of break in markings in case you want to respray your own airliner ), as required by the UK CAA.
The rule here was that if you held the required instructor ratings you could teach any PPL rating, but to train commercial pilots or instructors you had to hold a CPL or higher licence.
I almost made a career of it, flying just over 3500 hours instructing on cessna 152s mainly, before taking the commercial flight test. Despite changes in legislation there are still many full time paid club instructors in the UK with thousands and in some cases tens of thousands of hours instructing experience who have been granted restricted commercial licences for instruction only based on their original PPL Instructor qualifications. To suggest that a newly qualified CPL holder with 200 hours and an instructor endorsement can do a better job than them just by virtue of holding a CPL would be extremely naive.