ASX winners and losers from the Victorian budget

The Victorian state government handed down its budget today with billions in new taxes and cuts that will create winners…

| More on:
ASX shares Victorian state 2021 Budget written on chalkboard with colourful balloons

Image Source: Getty Images

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.

Medical facilities operators like the Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) share price and Sonic Healthcare Limited (ASX: SHL) share price could share in the Pallas love.

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.

This will suit engineering groups like Downer EDI Limited (ASX: DOW) and steel maker BlueScope Steel Limited (ASX: BSL) just fine.

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.

I can’t imagine the likes of Mirvac Group (ASX: MGR) and Stockland Corporation Ltd (ASX: SGP) being particularly happy.

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%.

To the extent that it dissuades punters, the Tabcorp Holdings Limited (ASX: TAH) share price and Crown Resorts Ltd (ASX: CWN) share price could be dealt a losing hand.

On the other hand, it will likely take more than a 2% tax increase to change bad habits.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Motley Fool contributor Brendon Lau owns shares of BlueScope Steel Limited and Sonic Healthcare Limited. The Motley Fool Australia has recommended Ramsay Health Care Limited and Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News