Keep in mind this isn't targeted only at netflix but also at other provider that do price geo-locking and may have local support.

Also consider I could sign up to netflix with my credit card 'not get access' and initiate a charge back (maybe even after a couple of months of watching through a vpn), the pressure would be exerted through visa/mastercard which australia can somewhat pressure (as they have local assets).

Naturally that goes to the point were Netflix refuses Oz customers the ability to get there service at all and misses out on any part of the Aus market or they commit whole hog and give Aus everything. The other thing to remember is that other small countries may initiate similar policies so it might not be just Aus who misses out.

Easy. It's legalese and much more subtle than this, but the general principle is :

"Either pay this or we instruct any bank with offices in Australia to refund all payments made to netflix at 150% retroactively for 10 years or cease operation in Australia"

This gives the banks themselves an incentive to go after netflix.

Will they go this far for netflix ? No way, I think, but that's one principle behind international enforcement.