Budget 2020 is looming: These sectors will be watching it closely
The Australian budget is still three weeks away but businesses, including ASX stocks, are already watching with anticipation.
Undoubtedly the government will aim to get the economy growing again but it will be a tough ask amidst weak consumer and business sentiment.
MYOB research from earlier this week found that only 39 per cent of micro businesses were confident the budget would deliver benefits.
While this number was a higher 75 per cent among businesses employing 100 or more, they’re in a minority – 98 per cent of businesses are small businesses.
Businesses of varying sectors surveyed by MYOB called for various measures to kick-start the economy. The most popular included a lowering of the company tax rate and removal of bureaucratic processes.
MYOB’s CEO Greg Ellis said the pandemic was a “once in a generation opportunity” for the government to make changes to benefit big businesses.
Some sectors will have a particularly sharp eye for differing reasons.
The defence manufacturing sector is one of the few that has been through positive times with the government as it earmarks $270 billion in increased spending over the next decade.
WA-based Orbital UAV (ASX:OEC) makes propulsion systems for unmanned aerial vehicles (UAVs). The government has earmarked $2 billion to go specifically towards this technology.
While Orbital already exports and deploys its tech to some of the world’s largest defence prime contractors, it is nonetheless eyeing off the government as a potential client.
Orbital CEO Todd Alder told Stockhead about his Budget night hopes.
“We’re encouraged by the country’s efforts to build a resilient and competitive industrial base and Orbital UAV stands ready and committed to support relevant domestic UAS programs with our industry leading propulsion solutions,” he said.
MYOB’s data has highlighted the travel and tourism sectors as those most in need.
“The impacts of 2020 have been hard felt by this sector and will likely endure for some time,” Ellis said.
While no ASX small caps have yet commented on the budget, industry groups have called for budget support.
The Australian Federation of Travel Agents (AFTA) last week made a submission calling for several support initiatives. These included Back to Business grants and establishing travel bubbles.
Another body on a more micro-level, the Caravan Industry Association, made its own pre-budget submission earlier this month. Among other things, it called for rebates for RVs (recreational vehicles).
One stock that could potentially benefit from such a measure is caravan maker and lessor Apollo Tourism & Leisure (ASX:ATL).