Mulesing might be bad, but flystrike is a hundred times worse. The name is somewhat misleading: when I first encountered the term as a child, I imagined bothersome flies buzzing around a sheep's butt. But flystrike is when those flies lay eggs and those eggs hatch and maggots begin to invade and eat away at the sheep's necrotic nether regions. Truly disgusting, gives prolonged pain, and is ultimately fatal. So one can't blame farmers for trying something, although a kinder method than mulesing would be infinitely preferable and I'd support the measures to have the technique replaced.
On the other hand, it's also been argued that the breeding programs that have encouraged the wrinkliness in the Merino breed (more skin surface = more wool) has led to an increased risk of flystrike that other breeds don't face. And perhaps breeding for less wrinkliness needs to be a part of the long-term solution. With some breeds you can get by with crutching, which involves shaving wool from the vulnerable area under the tail, but not removing skin or making incisions.
Finally, the pictures that are currently loading above are puzzling: mulesing is banned on sheep over one year old and normally lambs are mulesed a few weeks after birth. The pictures show much older sheep and therefore a much more extensive operation.
Mulesing is the surgical removal of strips of wool-bearing wrinkle skin from around the breech of a sheep. Mulesing is common practice in Australia as a way to reduce the incidence of flystrike on Merino sheep in regions where flystrike is common.