I disagree with Rudd on two counts - social and technical. I think the social aspects have been argued to some point, and will continue to be, so I will put my thoughts on this topic on paper from a technical point of view.
It is simply too expensive, impractical, unsustainable if not impossible to implement a blanket filter across all ISPs. Besides, any person who really wants to bypass the filter can easily do so without having to opt-out (the government, fortunately, cannot filter encrypted SSH traffic through which you can tunnel web traffic aka porn if so desired - and filtering SSH traffic would be a big hurt for the ICT industry which means it won't happen).
I once read that every week (or day perhaps) there are 600 porn sites going up. How the operators of such a filter plan to keep up still puzzles me. If they decide to use a heuristic algorithm to determine whether a site is porn or not, how will they ensure that legitimate pages (e.g., the human body) are not filtered? Will Australian students have to ask their parents to ask the government to opt-out of a porn filter for study? Won't this factor in itself render the filter moot, as it could become a trend to say that one needs no filter for study...or 'study'?
How does the government plan to implement an opt-out scheme? Is this filter going to be centralised so that people can be mobile - resulting in a bottleneck in terms of internet traffic? Or will it be at ISP level, incurring cost on private business who would have to maintain these filters on behalf of the government?
I cite the case of Tom Wood, a 16 year old Melbourne student, who broke the recent million-dollar NetAlert filter in a matter of minutes. Every system is bypassable by a determined individual.