Step one is stuff like this, require id to verify your age

Right, but the law doesn't do that. In fact it was specifically forbidden from doing that. Here's the full text of the Bill. Section 63DB specifically says:

(1) A provider of an age-restricted social media platform must not:
(a) collect government-issued identification material; ...

(2) Subsection (1) does not apply if:
(a) the provider provides alternative means...for an individual to assure the provider that the individual is not an age-restricted user

In plain language: you can only accept ID to verify age if you also have some other method of verifying age instead.

So far, it looks like most sites are relying on data they already have. The age of your account, the type of content you post, etc. Because I have not heard of a single adult being hit with a request to verify their age anywhere other than Discord, and even on Discord, it's only when trying to view NSFW-tagged channels. (Which is an 18+ thing, and completely unrelated to this law, which is 16+ for all social media. Despite Discord having been officially classified as not social media, but a chat app, which does not apply.)

It also says, in 63F:

(1) If an entity:
(a) holds personal information about an individual that was collected for the purpose of, or for purposes including the purpose of, taking reasonable steps to prevent age - restricted users having accounts with an age - restricted social media platform; and
(b) uses or discloses the information otherwise than:
(i) for the purpose of determining whether or not the individual is an age - restricted user; or ...
(iii) with the consent of the individual, which must be in accordance with subsection (2);
the use or disclosure of the information is taken to be:
(c) an interference with the privacy of the individual for the purposes of the Privacy Act 1988 ; ...

(2) For the purposes of subparagraph (1)(b)(iii): (a) the consent must be:
[(i–v) voluntary, informed, current, specific, and unambiguous]; and
(b) the individual must be able to withdraw the consent in a manner that is easily accessible to the individual.

(3) If an entity holds personal information about an individual that was collected for the purpose of, or for purposes including the purpose of, taking reasonable steps to prevent age - restricted users having accounts with an age - restricted social media platform, then:

(a) the entity must destroy the information after using or disclosing it for the purposes for which it was collected

In other words, whatever information you collect to do the age verification, unless you already have it, with the user's consent, for some other purpose, you must not store their information.

It would not have been hard to just not include that part of the law. Some privacy advocates would have spoken up about it, but the general public would have probably brushed it off. No, they included that because this isn't about information harvesting. It's a misguided but genuine attempt to protect kids. And, if you're looking for a more cynical spin on it, it's to win some good PR with people for being able to say they're protecting kids, while also not doing anything that would substantially hurt big tech's bottom line...like regulating the algorithms themselves.

But again, you mentioned the US government. What does that have to do with this? This is a law passed in Australia, but the Australian government. An entirely different country, and one with an actually functioning government and legislature.