Twilight of the monarchists
Those of us who support an Australian republic should hope that John Howard becomes Australia's first knight in twenty years.
At a stroke, the monarchist myth that the Queen is a figure above politics would evaporate. The myth that the support base of monarchists crosses party affiliations would go too, as those who support the monarchy and did (do?) not support John Howard, or vice versa, are few and far between. I believe that the monarchy is firmly anchored in the past rather than the future: the rise of Sir John Howard would render such an image inescapable, with the predictable harrumphing by David Flint only cementing this.
The "not this republic" crowd who helped scupper the 1999 referendum, led by people like Ted Mack, would not be able to ally with the monarchists over those who would strive for some sort of Australian republic.
If he cared about the Australian monarchical system, Howard should reject a knighthood. But that would be to place institutions above self, and Howard did not get where he is today by doing that. He and his wife would rather swan around like Lord and Lady Muck. This would help do the republic's work for it, and attract nobody to support the monarchy who hadn't already done so.