Banks, private healthcare operators, the stock exchange and construction companies are among the businesses expected to benefit from the federal budget.
While global mining heavyweights BHP Billiton and Rio Tinto are set to benefit directly from the repeal of the mining and carbon taxes, other sectors such as biotech and financial services are also expected to gain from new budget measures.
Analysts from brokerage Deutsche Bank said that the $11 billion boost to infrastructure would benefit companies such as Leighton and Lend Lease, giving them a gradual increase to their construction books.
The Business Council of Australia, which lobbies on behalf of Australia’s biggest companies, said the budget was a boost to business confidence.
”The government deserves credit for taking important steps to confront the long-term challenges Australia faces from an ageing population,” chief executive Jennifer Westacott said.
”The federal budget is more than a bookkeeping exercise – it is a strategic tool to build our economic resilience and a statement about what kind of society we want to bequeath to future generations.”
The banks that manage Australia’s $1.7 trillion retirement savings could be the beneficiaries of the plan to increase the retirement age to 70.
Goldman Sachs analysts Ryan Fisher and Andrew Lyons said AMP and Perpetual could see an increase in the balance of their pension funds and an increase in revenue from fees through financial advisers.
In the longer term, Australian biotech companies could also benefit from the creation of the $20 billion medical research fund, Morgan Stanley analysts said. They said private health companies Ramsay and NIB could see a boost to membership with the freeze on the Medicare levy surcharge.
Even economists say that the government’s tough budget could drive confidence to recession levels and delay future interest rate rises until late next year.
Their assessment comes as the government prepares to issue $36 billion in new bonds to help get the economy back to surplus.
”This budget, which does contain a reasonably broad-based tightening of fiscal policy, can only mean that rates will stay lower for longer or when they do go up they will go up more gradually,” said ANZ chief economist Warren Hogan.
Mr Hogan said he will be closely watching consumer confidence levels over the coming weeks, given that they are dangerously close to recession levels.
The market is pricing in a 44 per cent chance of a rate rise by the Reserve Bank in the next 12 months.
Higher rates have an impact on borrowing costs and the interest rate associated with the paying back of new government debt, in that it will make it slightly more expensive.
On Tuesday night Treasurer Joe Hockey said that it was time all Australians acted in the national interest and did their part by contributing to a better Australia with less debt.
With Sally Rose
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