Perhaps pragmatism will win out at the end of the day and the government will realise that a mass-media-style classification regime cannot be imposed on apps without modification, and perhaps they'll come to a compromise (such as accepting Apple's voluntary ratings and liaising with Apple's enforcement officials). Though, given the extraordinary efforts to force through internet censorship against both expert advice and popular opinion, I'm not sure one can count on the Australian government to exercise common sense.
That's assuming that Labor and the Tories don't join forces to push it through. The OFLC model, after all, is the status quo, and suddenly exempting iPhone apps (and, if there's going to be any consistency, anything digitally distributed) would be a radically libertarian change of the sort that would scare the horses (and, more importantly, the wowsers).
I imagine there'll be some sort of compromise that will require exempt app stores to have central classification authorities which are answerable to the OFLC in some form.
Yet another case where I'm left wondering if anyone involved in developing technology policy has ever actually used a computer. Will generic flash games be subject to OFLC classification? Will they need to cast their gaze over Farmville, say? Will they demand to view and classify every video posted on Youtube before Google allows Australians to access them? I've just opened up Minesweeper, and have checked the help file and About box, and can't see any classification given. But, hey, if they do ever decide to implement this, I guess it will be an important economic stimulus, given the vast numbers of public servants they will have to employ.
I too hope pragmatism will win out. Cartel Party theory, which seems to be rapidly accounting for 100% of party behaviour, paints a grim landscape where the two major parties are more like petrol stations selling the same product, at the same price, to the same sort of customers, but yet they are in 'competition'. A Green balance of power in these case would not help as I'm more than certain, as our host has pointed out, that the Liberals would side with Labor in this case - an easy populist move 'protecting' the children.
When the Greens get the balance of power, I can't see this type of digital censorship being a reality...see here for an example http://www.theage.com.au/technology/technology-news/greens-side-with-coalition-on-internet-filtering-policy-20100816-1267o.html