Budget 2022 breakdown: ASX-listed winners and losers
Sectors that could benefit from the 2022-23 Australian budget include childcare and construction.
Source: iStock
Mentioned
KEY POINTS
- The 2022-23 budget downgrades Australia's near-term economic outlook
- The short-to-medium term outlook for commodities was revised sharply lower, and so was consumption growth
- Key ASX-listed sectors to watch include aged care, childcare and construction
The Australian Federal Budget has been dubbed as a sensible one, used to reset parameters ahead of a looming economic slowdown and higher interest rates.
The key measures aim to provide a cost of living relief through cheaper child care, more affordable housing and reductions in medical costs. As well as measures to support the aged care sector and NDIS, address climate change and infrastructure.
Economic outlook
"The October Federal Budget sets out a challenging path ahead as a sharp slowdown in global growth, high inflation, rising interest rates, and falling real wages impact, with some additional drag from recent floods," notes Westpac Economics.
The government lifted its inflation forecasts, expecting it to peak at 7.75% in 2022, down to 5.75% in 2023, 3.5% by 2024 and 2.5% from 2025-26.
Growth prospects were downgraded, with the economy now forecast to grow 3.25% in 2022-23 and hit a trough of just 1.5% growth in 2023-24. Growth is expected to remain sluggish at 2.25% in 2024-25 and 2.5% in 2025-26.
Weaker growth reflects the government gloomy outlook for iron ore, with forecasts suggesting prices will slump to US$55 a tonne by the first quarter of 2023.
Consumers are also expected to falter under higher interest rates and cost of living pressures, with consumption growth sliding from 6.5% in 2022-23 to just 1.25% in 2023-24.
Budget 2022: Key Measures
Source: Westpac
Sectors to watch
"The budget is positive for childcare and construction companies but beyond that there is not really a lot in it for the share market," said Shane Oliver, Chief Economist and Head of Investment Strategy at AMP Capital.
"But unlike in the March Budget there are more losers this time including: multinationals; tax avoiders; foreign investors; Federal law breakers; and consultants, contractors & travel agents to the public sector."
ASX-listed childcare companies:
ASX-listed construction companies:
Aged-care also deserves an honorable mention as the government plans to to invest $2.52bn over four years to reform the aged care system, including the issues raised by the Royal Commission.
