For me, this bill is about respect. We are a nation and a state of different people. Indeed, our diversity is at the heart of our collective identity - different people, different views, different lifestyles.
If you read this casually you might skim by the truly radical element of what Baillieu is saying. Baillieu has no problem using the term "collective identity", but consider carefully what he means by this concept. It is not a "positive" identity, in the sense that it represents a set of positive characteristics shared by a community of people. Instead, it is a negative identity, in which people identify with the absence of shared characteristics.
Baillieu has come very close to jettisoning a collective identity. All that he has retained is a very limited negative collective identity. It's little more than the bare bones of a communal identity.
What are we to make of this? On the one hand, I think he is representing the liberal position honestly. There are Liberal Party leaders who claim that you can have mass, diverse immigration over many generations and still retain the strength of the older collective identity. It doesn't seem to me to be a likely outcome.
There are problems, though, in giving up on a collective identity. There are practical concerns like a lack of social cohesion; a decline in altruism; and a weakening motivation to defend the society you live in.
More importantly, there is a loss of the communal setting for people's lives. We gain much as individuals from a strong collective identity in which we enjoy a sense of shared history, of a common culture, of closely understood manners and mores, of a widely shared calendar of festivals and celebrations, of a distinct tradition linking generations to each other, and of art and architecture expressing the character of our own community.
Baillieu's position might be more candid than that of other Liberal Party leaders but it is also profoundly deracinated: it represents the mindset of the rootless, modernist individual who has become disconnected from his own communal tradition.