In my pinion, the malaise that infects most government departments now is that they are Canberra based and staffed with career public servants who change between departments or disciplines regularly rather than industry specialists.
I suspect that this move is really driven by laziness from bureaucrats wanting to make their life easier without having any understanding of the impact of their decision.
Putting the regulations aside, AsA's raison d'etre is to provide infrastructure to facilitate aviation safety. Or in their own words:
Our purpose is to provide safe,
secure, efficient and environmentally
responsible air navigation and
aviation rescue fire fighting
services that are valued by the
aviation industry.
Safety is our number one priority. We
are proud that global benchmarking
consistently places Airservices as
one of the top air navigation service
providers for safety in the world.
It would seem to me that this move is an abrogation of this responsibility.
Or put bluntly, they are trying to short change us by not delivering a core safety service in the interests of cost cutting