To allow others to steal and/or profit from intellectual property that we have created is no different than saying it would be OK to smash your way into a designer’s atelier and grab whatever outfits you fancy. Copyright law protects against theft no less than any other property law.
The obvious point is that the example given is much more like saying it’s OK to sit outside a designer’s atelier with a sewing machine and make your own versions of whatever outfits you fancy. Which is indeed allowing others to profit from our creations but it’s a long way from letting them steal our actual stuff. That “and/or” skates over some fairly important differences. Copyright law protects against infringement but it doesn’t blindly prohibit people making any kind of profit from any kind of use of our copyrighted materials: and nor should it.
Every writer depends on common-sense limitations on other creators’ copyright; without them it would be impossible and/or (!) uneconomic to research or write anything. Every act of creation involves some transformation, and some copying, of what has come before. If Woody Allen paraphrases William Faulkner’s best line in a movie, how is Faulkner really harmed? Balancing the rights of our creator-selves and our copier-selves requires continuous recalibration and renegotiation as use (and technology) change, and I think the Australian Law Reform Commission’s fair use proposal is a broadly reasonable attempt.
On the other hand, I think that statutory or compulsory licences for selected purposes are useful in maintaining the balance. They make it easier for creators to get paid, and they make sure that copiers can use copyrighted works as they need to, without being held to ransom. Like Jaivin, and unlike the ALRC, I don’t think these would be more efficiently replaced by voluntary licences, whether individual or collective. There are certainly questions over which uses exactly would fall outside the fair use exceptions but remain within the voluntary licence scheme, but they’re not unanswerable questions, and none of it has much to do with theft.