The fact is this country is producing lots and lots of wine at the moment, to the point of a "wine glut" as it's often referred to. You can buy wines made from excess grapes (clean skins) which are unlabelled and are sometimes great and sometimes not so great.

There are good wines and bad wines made here, as well as in other countries. Spain makes some very nice reds (I quite like Casillero del Diablo). Some white wines in New Zealand taste like cats piss but sell by their brand reputation, but some are quite nice.

The real reason this law is going ahead is that I suspect the EU will try and block or quota Australian wine imports, so they are forcing the arm of the government here. Fine, though the real reason for this naming scheme is that European wines are undercut by cost by many Australian wines by the same "name". Whether or not the Australian wines are better or worse is not the point.