Yes, the main reason they are giving is kiddie porn.
There is bad stuff on the internet, yes, but this filter isn't going to fix most of the problems its aiming to because its not filtering p2p downloads - which from what i have read is the main way of spreading kiddie porn? It's not going to stop chat sites - how can they stop private discussion? Do they really think people that are seriously looking for that information (bomb making, drug making, kiddie porn) to do whatever bad stuff will go, oh no, the government blocked it, best be off to become a productive member of society? People got information before the internet, they still will. Kiddie porn is policed worldwide, but there is massive amounts of it hidden on the net, you have to know (ie be told by someone else in the know) where to find it.
I just don't see how its really going to effect the people it is aimed at? I have a 7 year old, and will probably install a filter when she starts using the computer a lot more, but that is my choice.
What it may filter is youtube, facebook, msn, etc. Apparently there will also be a security issue with online banking as the encryption will be broken. All internet will be slowed as isp's try to filter huge amounts of information.
"Australia's level of net censorship will put it in the same league as countries including China, Cuba, Iran and North Korea, and the Government will not let users opt out of the proposed national internet filter when it is introduced." courier mail
I think the theory behind it is good, but in practice it is not going to work. I think it just opens the floodgates to becoming a (net) nanny state.