Taking off my CBA hat and putting on my private practice hat, one of the differences between a piece of legislation like the Privacy Act and other pieces of legislation is that it's essentially designed to be user friendly. For example, the primary right that's given to citizens under this piece of legislation is the right of access to their own information. It sets out a scheme through which they can, without the assistance of lawyers, fill out forms and ask for their own information.
But to get directly to your question, people have asked why they are collecting this information, and my response has had to be “Because they can”. They ask what they can do about it, and I answer “Not much”.