The third-tier national competition is presently the hottest debate in Australian rugby with critics saying it is not financially viable and that it will ruin the game at club level.
But O'Connor argues it is vital for the game's domestic development.
"From a selection point of view we need to see these fringe guys under the pump and up against players of similar ability," he said
"Clearly in the club competition you can get away with not having to aim up every time.
"You've got players who are on full-time contracts playing against guys who are part-timers, who work five days a week and don't get the opportunity to spend the same sort of time in the gym.
"Look at the difference in those guys physically. It's huge.
"There's always been a gap between club football and the professional level but the way the game is going it's even more pronounced."
O'Connor said that the competition, designed to bridge the gap between club rugby and the Super 14Â level in Australia, should be given the go ahead and slammed the sides who had voiced opposition to the eight-team series which is due to start in 2007.
"I don't see them doing anything at the grassroots. Where are their junior clubs?" he added.
"They just bring in players through tertiary allowances, scholarships and opportunities at university.
"It's all self-interest as far as I'm concerned. Everyone's trying to protect their own patch."