He/she's right in that CASA got their butts kicked in their last ICAO audit for not having a decent systems culture. That's one of the reasons we've all heard so much about safety management systems recently.
'Not meeting Western standards' is drawing a long bow, because other Western civil aviation authorities have been criticised in their audits as well. Nor does he/she take into account the fact that this happened two years ago and CASA have been working on improvements ever since. ICAO audits are available on line and some of the African/South American ones make for scary reading. CASA isn't like that and not even ICAO were silly enough to suggest that they were.
This is probably the key difference between organizations like Tiger and others. CASA were told to shape up and they did. Tiger was told to shape up and didn't, so guess what happened. The ICAO result back in 09 also may have something to do with CASA's freakout about Tiger's lack of sms and may be why they've taken it so seriously.
As for losing tax payer money, as a number of posters on here have found to their detriment, it's extremely difficult to sue an Australian Government department for loss of income / spoiling your day; they all have numerous escape clauses written into their legislation.