The most difficult problem in using such ratios to assess fundamental values is that one cannot avoid taking a stand on the appropriate value of the equity premium, the extra return that investors require to hold equities rather than bonds.
We do not see the need for the Fund’s lendable resources to be increased any further at this stage. We support a substantial increase in the quota resources so that the NAB can be rolled back once an increase in quotas is effected. This will ensure that the Fund remains a quota-based organization as it should be. Governance reform 20.