Interesting developments in Australia - ANZ
|Analysts at ANZ explained that there were a couple of interesting policy developments overnight in Australia.
Key Quotes:
"First, the Government announced that from 1 July it will impose an ‘Australian Domestic Gas Security Mechanism’ that will give it the authority to limit gas exports in order to ensure domestic supply.
In our view, the real issue is one of price and it isn’t clear from the details we have at this stage what impact these controls will have on the domestic price of LNG.
Watch this space it seems. The second development is the indication the Government will highlight a different measure of the fiscal position in the upcoming budget - the net operating balance.
This measure focuses on operating expenditure. That is, it excludes net capital expenditure – unlike the underlying cash balance, which captures both operating and capital expenditure.
In effect, it allows for debt to be considered in so-called ‘good’ or ‘bad’ terms, with ‘good’ debt that which is used to fund capital expenditure.
Of course, in itself, this doesn’t guarantee that the capital expenditure funded by the ‘good’ debt makes sense. The Treasurer is speaking today and will undoubtedly provide more detail about these
plans.
We note, however, that they are hardly radical – with New Zealand long having used the net operating balance as its main measure of the fiscal position."
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