SYDNEY: Australia’s government has unveiled a stimulatory budget ahead of this year’s federal election, with measures expected to underpin short-term consumer demand, according to analysts.

       A fuel-tax cut, one-off cost-of-living cash payments and infrastructure spending are among policies seen supporting Australian equities.

       The benchmark S&P/ASX 200 Index has gained 0.3% this year, besting most Asia-Pacific gauges amid soaring commodities prices and a strong earnings outlook.

       “Although this budget does not eliminate the cost of living pressures which consumers have been experiencing of late, it does at least reduce some of the headwinds,” UBS Group AG analysts led by Richard Schellbach wrote in a note.

       It also doesn’t “detract from the positive profit momentum which we have seen from Aussie companies this year”.

       A 50% cut to fuel excise lasting six months should be positive for Ampol and Viva Energy, Jeffries analysts led by Michael Simotas wrote in a note.

       Media reports in the lead-up to the budget suggested excise on draft beer would be cut by 50%.

       “Measures such as the fuel excise cut and cost-of-living payments should support near-term consumer spending, though ‘we remain cautious on discretionary retail in the longer term’ given inflation, expected rate hikes, softening house prices and a spending shift from goods to services.

       “Consumer discretionary and consumer staples stocks such as JB Hi-Fi, Harvey Norman, Premier Investments, Metcash, Coles and Woolworths could be beneficiaries of increased consumer spending,” Commsec analysts led by Craig James wrote in a note.

       Defence-oriented companies Austal and Codan may be impacted by the government’s A$9.9bil (RM31.3bil) investment in new positions, equipment and training for the country’s premier security agencies with a focus on cyberwarfare.

       Expansion of a first-home buying programme should see a continued investor focus on major banks – ANZ Bank, Commonwealth Bank, National Australia Bank and Westpac Bank – alongside regional banks, such as Bendigo & Adelaide Bank and Bank of Queensland.

       Small-business provisions could boost job hiring company Seek, along with car sellers and auto parts companies carsales.com, Eagers and ARBUBS.

       One-time A$420 (RM1,325) tax offset for low and middle-income earners benefits retailers exposed to low-income groups.

       Key amongst these would be Coles, with Super Retail, City Chic, Adairs and Collins Foods also seeing support.

       Fuel excise reductions supportive of vehicle kilometers and auto-related stocks including Ampol, Bapcor, GUD Holdings, AMA Group, Eagers Automotive, Autosports Group and Viva EnergyDowner and Seven Group could see a boost from regional infrastructure spending directed at projects.

       This especially relates to projects covering resource extraction and processing, low emissions technology and energy production, and water infrastructure.

       Meanwhile, technology investment boost to support digital adoption by small-medium enterprises is positive for Australian tech firms that get a high proportion of revenue from Australia and SMEs, RBC analysts led by Garry Sherriff wrote in a note.

       Key beneficiaries: Elmo, Xero, Macquarie Telecom, Nearmap, NextDC and Megaport. — Bloomberg