The problem with this word is that it seeks to shut down those who oppose any aspect of the religion. For some odd reason being a Muslim is considered an ethnicity, or race. This further complicates any polarizing discussion about what Islam looks like in a Muslim minority country like Australia.
Racism is a nasty, ignorant crime. But if you oppose the requirement of full head coverings of Muslim women, are you being racist? How about Islamophobic?
Most reasonable people want peace, not violence. Most people do not condone or want extremist views. Yet violent religious extremists are a growing problem in Australia's nearest neighbor Indonesia. Not to mention we've had our own share of Islamic terror here in Australia.
The road to peace is not helped by such words as "Islamophobia". This is particularly true when Islam has the historical habit of crossing into politics and power with brutally oppressive laws in Islamic governed nations.