The national building program in the Rudd government's second budget could be a boost for several sectors of the stock market, according to AMP Capital Investors chief economist Shane Oliver.
At the centrepiece of the 2009/10 budget, the government is investing $22 billion to improve the quality, adequacy and efficiency of transport, communications, energy, education and health infrastructure across Australia.
Included in the budget was an $8.453 billion investment in roads, rail and ports, up to $43 billion for a national broadband network, $3.565 billion for clean energy infrastructure, $2.585 billion for education infrastructure and $3.172 billion for health and hospital infrastructure.
"The budget spending on infrastructure will help and could help infrastructure companies ultimately, but will help construction companies, development companies like Leighton Holdings, and building materials stocks," Oliver said.
"There's also benefit from the budget for clean energy stocks. So yes, there will be stock specific impacts flowing from the budget."
RBC Capital Markets senior economist Su-Lin Ong said the size of the deficit for 2009/10, at just under 5 per cent of gross domestic product, was broadly in line with expectations.
"Large deficits ... are going to be around for the next few years, but I guess the budget does highlight medium-term fiscal consolidation and an eventual return to surplus, albeit not until 2015/16," she said.
"I think by international standards the deficit is modest as are the levels of net debt ... and that should be enough to soothe the ratings agencies and see Australia retain its AAA status.
"And you know in this environment that's extremely important - especially given there is going to be record amount of issuance and you know Australia is going to sell an awful amount of bonds to fund this deficit."
