Budget ideas
Now the dust has settled on last week’s budget announcement, we have collectively come up with a number of ways that proposed changes to the budget may impact listed businesses, and provide some of these below.
This is not an exhaustive list by any means, so if you have a view on any part of the budget which has the potential to impact listed businesses in anyway, please feel free to share.
- The government clearly continues to push for private education operators with fee help now also becoming available for pathway providers (bridging courses) into universities. This will benefit the likes of Navitas (ASX: NVT), Redhill Education (RDH) and Academies Australia (AKG).
- As has been previously flagged there was no change to current FBT legislation. This will benefit McMillan Shakespeare (MMS) and SG Fleet (SGF).
- Although the budget was light on infrastructure development, a bright spot was road building. The only pure-play listed business is Seymour White (SW) with others to various degrees potentially benefiting including Transurban (TCL), Leightons (LEI), United Group (UGL) and Downer (DOW). However, the investment case is not clear-cut in many cases, given outlooks are somewhat clouded by mining capex exposure.
- A pause in the indexation of medical benefits schedule fees coupled with a Medicare levy surcharge appears to have been structured to drive more user-pays in private healthcare. This is likely to be a continued tailwind for Ramsay Healthcare (RHC).
- The introduction of co-payments/ fees for visiting doctors could impact on volumes for Primary Healthcare (PRY), Sonic Healthcare (SHL), Capitol Health (CAJ) and Sigma Pharmaceuticals (SIP).
- And finally, the proposed $20b Medical Research Fund is a potential positive for biotechnology companies, given this may provide better access to funding, possibly creating more valuable global medical devices and treatments.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
INVEST WITH MONTGOMERY
Andrew Legget
:
My prediction assuming all budget measures get through:
The deregualtion of university fees will see a significant increase in the fees being charged to students. Some of these universities will increase their fees to much higher levels than others due to the perception of prestige. This, coupled with the higher repayments on HELP loans to pay said fees will see many students seek alternatives to studying at university that can offer similar training but at a reduced cost. Companies that can provide these services (Seek being another that comes to mind) will see a decent increase in volume.