The Victorian state government handed down its budget today with billions in new taxes and cuts that will create winners and losers among ASX shares.
Victorian Treasurer Tim Pallas has gone in the opposite direction of his federal counterpart Josh Frydenberg!
While Frydenberg was all about spending and stimulus, Pallas unveiled $6 billion in new taxes plus $3.6 billion in cuts to public service.
This is despite the fact that the budget deficit for the state in the current financial year is nearly $6 billion better off at $17.4 billion than previously projected.
The ASX shares in better health
But there are some sectors that will be left smiling. Healthcare is one with the Australian Financial Review reporting $7.1 billion for hospitals and the healthcare system including $3.8 billion for mental health.
Victorian-based medical equipment supplier Paragon Care Ltd. (ASX: PGC) are also likely to be pleased with the news.
Infrastructure gets another leg-up
ASX shares that are exposed to infrastructure construction are another group in the winner’s circle. The Andrews government is upping its investments in this area to $22.5 billion for FY22 to FY25. This compares to the previous average $15.5 billion over FY16 to FY25.
Bearing the tax burden
On the flipside, property develops are seething at the Victorian government as a good chunk of the new taxes are aimed at the sector.
The state is looking to claw $2.5 billion extra through higher stamp duty and land taxes. Property developers that reap the benefits of rezoning will be slugged with a 50% windfall gain tax.
The concession to allow developers to get a stamp duty hall pass to sell unsold CBD apartments sitting on their books for a year or more is unlikely to make up for the pain.
Rolling the dice on ASX gaming shares
Pallas is also going after gamblers. Wagering and betting tax is going up to 10% on 1 July this year from 8%.
On the other hand, it will likely take more than a 2% tax increase to change bad habits.