LB Airservices/ CASA/ATSB/DoTRS etc. aren't to blame for the current system. The changes came in as a result of what industry decided they were and weren’t prepared to pay for. The days of the mantras "User Pays", Affordable Safety" etc.
They weren’t prepared to pay for people in Ops. Control providing an overwatch service & FPA to all IFR aircraft, nor Flight Service, nor people providing VFR a FULLSAR service, nor a handful of briefing offices around the country, nor sundry other stuff.
Personally I’ve always thought that’s about when the standard of pilot training and knowledge/smarts etc. started to go down the tubes for a variety of reasons. Perhaps education suffered, with instructors not knowing too much more than their students, those students becoming instructors and so it goes on.