Here are the ASX small cap stocks that might get a boost from Budget 2021
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Tonight all eyes will be on Canberra with the handing down of the Federal Budget for 2021 and a number of ASX stocks will be hoping to benefit.
While the full budget will only be released tonight, the government has progressively leaked details about promised funding for certain sectors.
Stockhead has recapped some of the pre-Budget 2021 announcements that are relevant to particular ASX small cap stocks or sectors and consequently might benefit in the months ahead.
COVID-19 had a mixed impact on this sector. While the closure of pubs was a negative, some companies that sold to bottle shops or better yet, to your house, benefited from an uptake in consumption.
From July 1, alcohol producers will more then triple the volume of liquor they can sell before needing to pay tax on it. It’s a move the industry has welcomed, claiming the beer tax is the fourth highest in the developed world.
Stocks set to benefit the most include Good Drinks Australia (ASX:GDA) and Redcape Hotel (ASX:RDC). The former won the right to operate the famous A Shed at Fremantle Harbour’s Victoria Quay last year while the latter runs several pubs and bottle shops.
Other beneficiaries from potentially cheaper alcohol include sellers Maggie Beer Holdings (ASX:MBH), Treasury Wines Estates (ASX:TWE), Australian Vintage (ASX:AVG), Lark Distilling (ASX: LRK) and Broo (ASX:BEE) as well as Digital Wine Ventures (ASX:DW8) which runs a wine wholesaler platform.
One of the most publicised leaks from Budget 2021 – and one of the biggest clusters of ASX stocks set to benefit – has been in relation to housing.
The government has promised further measures to help people get into the property market including upping the limit to which people can dig into their superannuation for a house deposit from $30,000 to $50,000 and adding 10,000 more places to the First Home Loan Deposit Scheme.
Inevitably this would be a boost for lending stocks such as Resimac (ASX:RMC) but also mortgage brokers including Mortgage Choice (ASX:MOC), Australian Finance Group (ASX:AFG), and Yellow Brick Road (ASX:YBR).
And inevitably real estate agents would see some benefit too, including McGrath (ASX:MEA) and RMA Global (ASX:RMY) as well as classified sites REA Group (ASX:REA) – which owns realestate.com.au – and Domain (ASX:DHG).
The government has promised $275.5 million to develop four hydrogen hubs in regional Australia.
In recent months a handful of ASX stocks have made forays into this industry including Lion Energy (ASX:LIO), Province Resources (ASX:PRL), Hexagon Energy Materials (ASX: HXG), Global Energy Ventures (ASX:GEV), Hazer (ASX:HZR), QEM (ASX:QEM) and Pure Hydrogen (ASX:PH2).
However the majority of them are at the feasibility or “term sheet” stage and the good news for them is that government investing money show that this industry is firming up as the real thing.
Childcare was another industry hit by COVID-19 but was heavily subsidised by the government.
Then it paid a “transition payment” of 25 per cent of fee revenue for two and a half months afterwards – conditional on centres capping their fees at pre-pandemic levels and guaranteeing jobs.
The budget is set to remove the cap on subsidies, and increase aid for families with multiple children who will get a maximum subsidy of 95 per cent.
The government has been promising increased digital investment and one niche industry set to benefit is game developers.