The google letter makes non-existent claims that aren't part of the proposed law. Like that youtube and google will somehow magically offer worse results. They can offer the exact same results they do now - they might just have to pay for it.
"If we had to pay more for news content, we would probably just cut it out because we don't want to pay - thus leading to worse results" doesn't quite have the same ring, does it :-)
As such the ACCC response is also full of bullshit. This is how politics go, and the sad part is that most people seem to simply read one side of the argument and go ranting off angrily based on the bullshit claims, rather than investigating the truth behind both sides