Well nothing really. It's been in place for quite a while and apparently working well. Here's a brief history. It's necessary because some people have been saying that Knights and Dames were always part of the Order of Australia but this isn't really true. In its original 1975 form as proposed by the Prime Minister of the time, Gough Whitlam, and accepted by the Queen, there were only three levels of the Order of Australia - Companion (AC), Officer (AO) and Member (AM). When Malcom Fraser became Prime Minister the following year he advised the Queen to institute the categories of Knight (AK), Dame (AD) and Medal of Australia (OAM) and this was done.
Things stayed like that until 1986 when the Queen and then Australian Prime Minister, Bob Hawke, co-signed letters patent abolishing the categories of AK and AD. So we no longer had Imperial honours. We had our own. We were and remain a constitutional monarchy - the Queen of England is also Queen of Australia - but we had begun to find our own place in the world and this seemed a sensible move.
So why the change now? Well, no-one seems sure. There certainly hasn't been any real agitation for it from the public. Apparently the decision to recommend the change was that of Tony Abbott, who is an avowed monarchist, and the selection will be made by the Prime Minister in consultation with the Council for the Order of Australia, which I presume means it will be the Prime Minister who makes the final decision.
We will just have to wait and see how it works out, I suppose, although for me it seems as if we are being dragged back into the past and while nostalgia can be pleasant I'm not sure it is necessarily a good thing.
You can find out more about the Order of Australia here.