Its a new levy to help fund student amenities provided by the university, specifically those directly not related to political pursuits on campus. Things provided by the university like counseling services, career advice, sports grounds, gym, parking ect. In theory this fee should help the universities to fund more of these initiatives and lower the cost of those of those that already exist (eg. sport court hire fees, parking fees, ect). It would also go towards funding things like breakfasts for needy students and other initiatives like that, it is up to the university how they allocate it. If they so wish they can give none to the unions and its not primarily aimed at boosting union coffers.
Enough about that, no, you do not have to pay it up front. Anyone eligible for a CSP is also eligible to put it on a government loan scheme, similar to how your ordinary university fees go on hecs.