It was, but the politicians aren't going anywhere, and anti LGBT sentiment has increased since last time, making it even more likely they'll get involved
The risks are small, particularly in the short term and also apply to questions like religion but I respect that decision as we never know the long term risks and history is full of warnings. Changes in the 2016 census removed some of the anonymity protections that existed previously and we ever had sufficient public debate about the changes. The mainstream media and politicians were very dismissive of privacy advocates and the public was typically apathetic and ignorant.
Census information can be important for the provision of services. The historical default is going to be that most services are tailored to cis hetero people and if many decision makers live in a cis hetero bubble as many people including myself do then data informs and assists in addressing inequities.
Religious lobby groups are immensely influential despite the census showing a steady decline in religion and we have a large and growing gap in public vs religious school funding which is causing serious disadvantage and social problems. The census data is potentially a valuable tool for people wishing to address inequalities and argue against bad policy. Gender and sexuality data will only strengthen the case against the redirection of taxpayer funds to these groups.