Corporate Finance Insights – September 2012

NAB’s Corporate Finance Insights reports utilise our expertise across a range of industry sectors to explore current issues, present forward looking views and opportunities for growth and progression. The report is published four times a year.

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NAB’s Corporate Finance Insights reports utilise our expertise across a range of industry sectors to explore current issues, present forward looking views and opportunities for growth and progression.  The report is published four times a year and explores topical issues facing Australian Corporates.

Just as each new volume of Harry Potter was bigger than the last, as the number and expectations of our readers grow, we’ve responded to the positive feedback by delivering a somewhat expanded publication.

In the opening article, we consider the debate in respect to urban infrastructure and argue that while it faces the obvious constraints of a weak funding environment and mining boom-induced crowding out, a less apparent but no less crucial effect, is the unresolved conflict between public and private interest in existing procurement models.

Despite an enormous amount of work on the ‘right’ way forward, the whole infrastructure industry seems dissatisfied with the approach to urban infrastructure development in Australia. We try to clear the impasse by outlining six broad principles that we believe can better align the interests of the government and the private sector, and therefore help reduce the delays and high costs of development.

A no less emotive issue, and one that we couldn’t ignore for this edition, is the debate on the principles of carbon pricing and what the ‘right’ price is. We compare our carbon pricing system (now law) to the systems of other jurisdictions, and consider how much reliance to place on imported permits. Given the Australian government’s objective of reducing carbon dioxide emissions and transitioning to a low carbon economy, we consider if the current carbon pricing mechanism is likely to deliver this in the most cost-effective way.

From the nation’s challenges on delivering necessary infrastructure, to the much-anticipated September release of Infrastructure New South Wales’ 20-year strategy, and the hot debates of poles and wires and public private partnerships in-between – the Honourable Nick Greiner AC shares his views on all things infrastructure.

Much has been made of the links with the so-called infrastructure spending deficit and the impact on productivity. With this in mind, our economics group re-visit the analysis of productivity levels to consider the question of how the provision of economic infrastructure affects productivity and what it means to Australian economic growth.

Though perhaps underestimated since the sharp drop-off during the global financial crisis (GFC), we look at the recent trends in the private sector funding of infrastructure and outline some of the ways banks and other market participants are continuing to evolve and remain relevant for this sector.

Finally, how do our state governments continue to develop much needed infrastructure in a constrained financial environment? We review the impact of the Victorian government’s asset sales in the early 1990s and set out the options available for  New South Wale sand Queensland in the decade to come.

We trust you will enjoy this installment of our Corporate Finance Insights series

Download the full report to find out more.