Comparing Airspace rules between countries is a little difficult, it isn’t just the letter C,E,D or G, but what the restrictions and responsibilities that go with each of them. Under the USA rules making Ballina a Class D tower and the airspace above class E would not restrict the movement of small GA aircraft to land at Balina or transit through the area. In the USA a transponder is not generally (there are some exceptions) required in class E. The only negative impact that adding a class D tower with E above would have is the cost and so a rational discussion about who pays and whether the benefit exceeds that cost can be had.
Under the Australian rules this change would result in a significant impact on a large number of users. Firstly a transponder is required in Australia in class E airspace. Adding a transponder to a Jabiru is proportionally as significant an impact as adding ADS-B to a citation. A large number of small GA users will need to pay quite a few thousand dollars to meet the equipment requirements transit that area.
Secondly pilots with RAAus pilot certificates are not allowed to fly in class D. This would have a very significant impact on the local flight school and maintenance facility. How could they continue to operate?
At every turn the Australian rule implementations create winners (in this case the IFR and RPT who have greater safety) and losers (the smaller GA and RAAus) who then have to fight it out. While the industry is fighting, CASA sit back and “consult” and no matter the outcome safety overall is diminished. CASA need to understand that more onerous rules often do not lead to greater safety. By requiring transponders universally in class E, it makes having larger areas of class E more costly and difficult to implement which leads to an overall reduction in safety.