The photos were taken by the Olympia's mother, Polixeni Papapetrou. I am not sure this makes a difference to the idea or arguments relating to exploitation. However, it does add to the dynamic of the argument the question, who should be able to make decisions relating to the photographing of minor children?
Nevertheless, the interesting part of this story is that Olympia Nelson is "really, really offended" that the PM, Kevin Rudd, cannot stand the images of a naked six year old Olympia. I prefer Brendan Nelson's (no relation as far as I know) characterization of the cover of Art Monthly Australia being the equivalent of a two-fingered salute to the rest of society.
The arguments being presented from both sides have some validity but none seem to be structured with a view to finding or striking some balance between the value of protecting children and any artistic value such images might have.
Art Monthly Australia have missed an opportunity to advance the argument by including other images of bondage involving a Japanese schoolgirl and a woman on the receiving end of some oral sex from an octopus. Sounds a little fetishy to me but I am sure it will peak some one's interest. Nevertheless, this is hardly a good means of getting people on side with your position.
The idea that these publications receive federal funding and therefore must comply to a certain standard would seem that the government offers funding as a means of dictating norms. There are probably arguments relating to free speech on this front but there are equally valid arguments that if the government is paying for it then it perhaps has a right to expect certain content acceptability provisions are to be put into place.
It would seem that this debate still has a ways to go before any resolution is found.