Which ASX 200 shares could benefit from the federal budget?

Tonight is budget night (again). Let's see how this could impact ASX 200 shares…

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Key points

  • It's 2022's second budget night tonight
  • All eyes will be on the Treasurer when he hands down an updated budget at 7.30
  • So let's take a look at the ASX 200 shares to watch...

Believe it or not, tonight is federal budget night. If you're a little confused, I wouldn't blame you. Yes, we've already had a budget this year, the one delivered back in March.

But that was a different government, with a different Treasurer. Normally, the economics enthusiasts among us get one budget a year to salivate over. But due to the change of government and the new Treasurer's wishes, this year we are getting two for the price of one.

New Treasurer Jim Chalmers is now scheduled to deliver this new budget (some are calling it a mini-budget) at 7.30 pm tonight.

Now, of course, we won't know everything that's in this new budget until it gets released, as is the norm with these things. But we can speculate as to what it might mean for the economy, and of course, ASX shares.

An analysis of the upcoming budget from Bloomberg predicts the key areas to watch are infrastructure, resources, housing, childcare and telecommunications.

Which ASX 200 shares are ones to watch after the budget?

The report points out that the government could be set to pledge $96 billion for road and rail investment. No doubt this will go towards some road and rail upgrades and perhaps even new links altogether. But it also warns that some of this cash may come from scrapping other previous government promises, such as commuter car parks.

Some ASX shares to watch in this space are construction and building companies. Those include Adbri Ltd (ASX: ABC), Boral Limited (ASX: BLD), and Lendlease Group (ASX: LLC). Another one to watch might be toll road operator Transurban Group (ASX: TCL).

The report also predicts that the recent government interest in funding critical mineral supply chains will continue. This could see more grants to ASX 200 shares in the lithium, rare earths and battery metals space. So keep your eye on shares like Pilbara Minerals Ltd (ASX: PLS) and Lynas Rare Earths Ltd (ASX: LYC).

Housing, childcare and telecommunications

Housing continues to be a potent political issue as well. So Bloomberg argues that we could see some further developments addressing these issues in tonight's budget. We already know the government has a new 'first home guarantee' scheme that it took to the election.

The government has also indicated that it wants to see super funds invest in affordable housing. So it will be interesting to see how property-linked ASX 200 shares like REA Group Limited (ASX: REA) and Domain Holdings Australia Ltd (ASX: DHG) fare following this budget.

The government has also already announced an increase in paid parental leave from 18 weeks to 26 weeks from 2024. We could see more announcements in this arena tonight. So more ASX 200 shares to keep an eye on include those in childcare. Think G8 Education Ltd (ASX: GEM) and the like.

Finally, Bloomberg reports that the government is looking at investing another $2.4 billion into the national broadband network (nbn) to expand full-fibre access to another 1.5 million premises by 2025. That could have direct implications for the ASX 200's telco shares. Those include Telstra Corporation Ltd (ASX: TLS), Aussie Broadband Ltd (ASX: ABB), and TPG Telecom Ltd (ASX: TPG).

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband Limited. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended Aussie Broadband Limited, REA Group Limited, and TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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