The government has announced a number of key measures that could benefit the following industries.
So, here are some ASX shares you may want to add to your watchlist.
Aged care
A significant chunk of the budget is being deployed in the aged care sector. The government announced a $17.7 billion package to be spread out over five years after the Royal Commission into Aged Care Quality and Safety.
As a result, the share prices of Estia Health Ltd (ASX: EHE), Japara Healthcare Ltd
(ASX: JHC) and Regis Healthcare Ltd (ASX: REG) have surged today. However, I would question why these businesses have performed poorly in recent times.
Businesses in the aged care industry tend to have low gross margins due to a high level of capital costs.
Infrastructure
The government will be allocating $15.2 billion over 10 years for road, rail and community infrastructure projects.
$2 billion will be provided to improve the national rail freight network and $4.6 billion for two major highway upgrades in South Australia and New South Wales. These are the big-ticket items.
Adbri Ltd (ASX: ABC) could be a sound investment given its the second largest supplier of cement in Australia. Construction supplies and materials will be needed so it may be worthwhile to have a look at Boral Limited (ASX BLD).
Health
The government is investing $353.9 million over the next four years to support women’s health including funding for cervical and breast cancer, and reproductive health.
$100.4 million will be allocated for improvements to cervical and breast cancer screening programs.
One business that will directly benefit from this is Volpara Health Technologies Ltd (ASX: VHT), which develops software to measure breast density, compression, dose and quality.
Another one is Healius Ltd (ASX: HLS), a healthcare business that provides pathology, diagnostic imaging, medical centres and low-cost fertility services, such as IVF.
Investors should note Healius is carving out its capital intensive medical centre business, which will likely lift its margins.
Energy
The government has recognised the importance of renewable sources of energy by committing $539.2 million into clean hydrogen and carbon capture projects.
One big energy company to benefit from this is Forescue Metals Group Limited (ASX: FMG), which announced plans to invest capital into green hydrogen to expand the business.
A different play could be Hazer Group Ltd (ASX: HZR), which is in process of commercialising a more efficient process for producing hydrogen. This process involves converting natural gas and methane into hydrogen and graphite.
