Scrip for scrip rollover allows you to defer your CGT gain until a later CGT event happens to your shares. You don't have to choose the rollover if you don't want to.
If you choose scrip for scrip rollover, the capital gain made from the disposal of the St George shares is disregarded and the cost base of your new Westpac shares is based on the cost base of the original St George shares.
You can apply the CGT discount when you dispose of your new Westpac shares, providing the combined period that you owned the original St George shares and the new Westpac shares is at least 12 months.