Ignoring the issues of real person vs. imaginary character, literary merit and how much influence fantasies have on behaviour, I think a large problem with the Australian law is the fact that it's not consistent with the age of consent. Having a law that states you're allowed to have sex at 16 and at the same time declaring anyone under the age of 18 a child when determining what child pornography is, will lead to confusion. And not only for fic writers. What happens to seventeen year olds who take pictures of themselves having sex? Or masturbating and sending it to their lover?
Listen Australian legislators: I think it would be a good idea to take the age of consent into account when talking about child pornography.
There. Now all troubles should be over. Except the chan issue. And everything else I ignored. And the fact that my powers of changing the laws of a country on the other side of the globe by force of my mind probably don't work.
So, nothing is solved. But I rambled and feel better for it.Over and out.