In a number of instances, BBSW has become the default reference rate without much thought being given as to whether it is the most appropriate reference rate. BBSW is a credit-based reference rate. It is based on the borrowing costs of the major banks, with the credit risk that entails embodied in the rate.
For a number of purposes, such a credit-based rate is completely appropriate. However, for other purposes, a rate that is closer to risk-free may be more appropriate. For instance, in recent years, market participants have moved to use overnight-indexed swap (OIS) rates more often when discounting the cash flows in their swaps.