Like Christmas, only without any of the things that make Christmas fun, the annual Federal Budget will be handed down tonight in Canberra – the north pole of economics – at 7.30pm by the Santa without a mantra, Treasurer Josh Frydenberg.

Instead of trickle down economics, what we can offer you is a trickle down preview of what we know so far via traditional trickle leaking – a favourite of governments which pack a pre-election budget choc-full of sweeteners which taste great, provide a wee sugar hit, but may not do much in the long run.

The morning media chatter is falling the way of the federal government’s flotilla of press releases, serving to nicely highlight the Morrison government’s chosen angle of a strong economic outlook, supported by a generous cost-of-living package.

For now, let’s stick to what we know, cross referencing the official drip feed of declarations with the duck-feed announcements on morning telly.

Let’s start with the Lamington

It might not be the centrepiece, but when Cabinet and its apparatus of advisers actually come up with something concurrently wicked, very Australian and has some actual news value, they should be encouraged where possible.

Sydney’s Daily Tele is reporting the Treasurer has a fix to extending the COVID-inspired $1080 low and middle income tax offset (LMITO, that’s the ‘lamington’) with what they’re describing as a straight cash payment for all of us earning under $126,000.

This morning Treasurer Josh Frydenberg flagged other one-off cash payments including at least $250 for pensioners and other prisoners of welfare, such as another subsidy to back rising childcare costs.

Frydo also confirmed on Channel 7’s Sunrise that there will indeed be, ‘a temporary cut to the fuel excise’ to ease pain at the petrol pump and the Treasurer promises drivers will see an almost instant drop in prices.

The cost of living, baby!

As the Treasurer said this morning on several occasions: “It’s the number one topic around the kitchen tables of Australia.”

Here’s your cost-of-living sweeties so far:

  • ‘One off cash payments’ – the number being bandied about is $250 for lower-middle income families

  • A fuel excise cut – temporary – cuts up to 20 cents a litre

  • A new first-home buyer scheme ensuring opportunity guarantees – spots to be expanded from 20,000 to 50,000 annually

  • A billion dollar childcare subsidy booster, good from July 1 to March 7 2022 – worth circa $225m over the rest of 2021/22 and $670 million a year ongoing

  • Self-funded retirees will get an extension of the 50% cut in minimum drawdown requirements through to EOFY 2023, enabling closer, faster access to income

  • $2.2bn of pension and welfare payments good to go this week – and expected to benefit almost one in five Australians this year

  • The gov’t also says it will delay high-income bracket tax breaks


Sadly, it’s not all beer and skittles…

There are books which need balancing.

Floods, fires, pandemics, floods, rising cash rates, rising bond yields, floods and war in Ukraine are the real challenges Frydenberg needs to deal with.

First to address – the national debt is big. It’s almost $1 trillion and although the cost of servicing that debt is about to kick on, the Treasurer says this is as bad as it will get, with debt levelling out in the medium term supported by all the continuing economic growth he’s been talking up.

Recent spending, followed by booming minerals exports, has economists calling the Budget deficit to come in around $70-$75bn for 2022/23. That’s a neat trim, reflecting toppy commodity prices on the $100bn called at the MYEFO budget review in December.

Economists including AMP Capital’s Shane Oliver expect the deficit to hit $55 billion the following fiscal year.

The headlines this morning were all about the gov’t factoring in an unemployment rate at multi-decade lows; Finance Minister Simon Birmingham saying the rate will be at 3.75% in the September quarter. This infers Aussie wages will (at long last) rise. We’d wait on banking this particular cheque.

As is de rigeur – the budget will also lean on conservative estimates of the cash bonanza being delivered by national minerals exports as coking coal and iron ore continue to discover new, record prices.

Other sectors set to benefit


* Total spend to exceed $120 billion over decade
* $18 billion immediate bang for infrastructure builds across the country
* Extra infrastructure spending for states: NSW ($3.3 billion) Queensland ($3.9 billion), Victoria ($3.3 billion), SA ($2.8 billion), WA ($2.1 billion), Tasmania ($639 million), ACT ($51 million), NT ($361 million)
* $3.1 billion in new commitments for the $3.6 billion Melbourne Intermodal Terminal Package (VIC), including:
* $1.2 billion for the Beveridge Interstate Freight Terminal in Beveridge, taking the total investment to $1.62 billion;
* 280 million for Road Connections, including Camerons Lane Interchange, to the Beveridge Interstate Freight Terminal;
* $740 million for the Western Interstate Freight Terminal in Truganina; and
* $920 million for the Outer Metropolitan Ring – South Rail connection to the Western Interstate Freight Terminal.
* $1.6 billion for the Brisbane to the Sunshine Coast (Beerwah-Maroochydore) rail extension (QLD)
* 1.121 billion for the Brisbane to the Gold Coast (Kuraby – Beenleigh) faster rail upgrade (QLD)
* $1 billion for the Sydney to Newcastle – (Tuggerah to Wyong) faster rail upgrade (NSW)
* $678 million for Outback Way (NT, WA, QLD)
* $336 million for the Pacific Highway – Wyong Town Centre (NSW)
* $336 million for the Tasmanian Roads Package – Northern Roads Package – Stage 2 (TAS)
* $200 million for the Marion Road – Anzac Highway to Cross Road (SA)
* $145 million for the Thomas Road – Dual Carriageway – South Western Highway to Tonkin Highway and interchange at Tonkin Highway (WA)
* $140 million for Regional Road Safety upgrades (WA)
* $132 million for Central Australian Tourism Roads (NT)
* $120 million for the Adelaide Hills Productivity and Road Safety Package (SA)
* $46.7 million towards the Athllon Drive Duplication (ACT)

The Budget also includes additional funding for existing projects and Roads of Strategic Importance (ROSI) corridors:

* $2.25 billion for the North South Corridor – Torrens to Darlington (SA)
* $352 million for the Milton Ulladulla Bypass (NSW)
* $320 million for the Bunbury Outer Ring Road (Stages 2 and 3) (WA)
* $200 million for the Tonkin Highway Stage 3 Extension (WA)
* $45 million for the Ballarat to Ouyen – Future Priorities (VIC)
* $68.5 million for the Cooktown to Weipa Corridor Upgrade bringing the total Australian Government funding to the corridor to $258.5 million (QLD)
* $500 million for Urannah dam in central Queensland
* $678 million for sealing 1000km of the Outback Way
* $2.26 billion for Adelaide’s North-South corridor motorway
* $40 million for bridges
* $74 million top-up for Perth city deal
* $668 million for southeast Queensland city deal
* $5.4 billion for Hells Gates dam in north Queensland


* Medicare to cost around $126 billion over four-year forward estimates
* Four-year rolling funding agreement and annual increases for Aboriginal Community Controlled Health Services
* $700 million for regional health specialist training
* $207 million for youth mental health – Young people with severe and complex mental illnesses will benefit, and to ensure additional treatment services and support.
* The Early Psychosis Youth Services will continue and be expanded as part of the government’s priority to look after mental health and prevent suicide.
* $61 million for the Australian Genomic Cancer Medical Centre to research and develop drugs for people with advanced cancers
* $315 million over four years to extend the national ice drug action strategy
* $375 million WA cancer centre
* Extra $52 million over four years for Lifeline services, the government anticipates will help the organisation meet the growing level of demand for its support services
* $58 million endometriosis package
* $190 million (five years) into prevention/intervention in family, domestic and sexual violence
* $104 million to prevent technology and devices being used to perpetrate or facilitate family, domestic and sexual violence
* Under state-based deals to target mental health and suicide prevention, $383m will be spent over five years for support and services in NSW.
* SA will get $128m and the NT $43m.
* Biohealth  – $2bn to transform academic research

Health/biohealth related stocks of budgetary interest

IDT Australia (ASX:IDT)

Two weeks ago, IDT encountered a setback after announcing that its submission for the Manufacturing Collaboration Stream Grant has been unsuccessful.

IDT had hoped to be involved in the Australian government’s plan to bring mRNA research into the country.

The company is however continuing to progress several alternative strategic options, includes its application to Round 2 of the MMI translation stream which still remains live.

Other biotechs that may get a boost from the planned $2bn to transform academic research into businesses include:


Clarity Pharma (ASX:Cu6)

The company is progressing its portfolio of next-generation radiopharmaceutical products through clinical trials in Australia, as it seeks to improve treatment outcomes for multiple indications of cancer.


Opthea (ASX:OPT)

This company is a clinical stage biotech developing drugs for retinal diseases.

Its lead asset, OPT-302, is currently undergoing a Phase 3 clinical trial where it’s being studied in combination with ranibizumab (the current existing drug in the market), compared to anibizumab alone.


Proteomics (ASX:PIQ)

PIQ has identified and validated a panel of protein biomarkers with the potential to treat oesophageal cancer.

Since October 2020, Proteomics and QIMR Berghofer have been collaborating on the development of a simple blood test for oesophageal adenocarcinoma, the most common form of oesophageal cancer.

The blood test used a panel of biomarkers, or protein ‘fingerprints’ in the blood, initially identified by QIMR Berghofer researchers, searching for early-stage oesophageal adenocarcinoma.


* $86.7m counter-terrorism strategy will create a national offenders register to monitor convicted terrorists once they have left jail
* $10 billion over two decades set aside for an east coast submarine base in Queensland or NSW
* $4.3 billion to help build a new dry dock facility in Henderson, Western Australia, with construction to start in 2023
* Total defence spending expected to be around 2.1% of GDP
* $282 million in the Northern Territory for 34 capability projects, and maintenance and servicing work
* $875 million for 234 defence site projects including barracks and airfields
* Support for Ukraine military forces

Defence related stocks of Budget interest

Austal (ASX:ASB)

The defence focused shipbuilder is one of the world’s leading designers and builders of of large, complex naval and commercial vessels.

Austal’s capabilities also include zero emission fast ferries.

Is a regional supplier to the US and Australian navies, and currently operates five shipyards in four countries. Just last week, Austal delivered the first of six 58m Evolved Cape-class Patrol Boats (ECCPBs) to the Royal Australian Navy.

Xtek (ASX:XTE) 

Xtek develops a range of defence-related products, including  tactical and protective equipment, explosive ordnance disposal robots and X-ray equipment, forensics, logistics, and advanced carbon fibre composites and spacecraft satellite and launcher systems.

This company had received an order from the Morrison government just seven days prior to the AUKUS announcement last year – a $1.9 million order for spare parts for its Small Unmanned Aerial Systems (SAUS) used by the Defence Force

Bisalloy Steel Group (ASX:BIS) 

The company produces many different types of steel including armour plate for Australia’s ballistics, defence, naval, vehicles market and for overseas customers.

Quickstep Holdings (ASX:QHL)

The company offers a unique exposure to the global aerospace and defence sector.

Although most of the defence budget will be targeted at our naval capabilities, the air force will also get increased funding,

The Royal Australian Air Force  (RAAF) has just confirmed its receipt of four additional F-35A Lightning II aircraft, taking the total size of the fleet to 48.

The F-35 Joint Strike Fighter (JSF) aircraft program is supported by Quickstep, which supplies the vertical tail parts to BAE Systems under an agreement with BAE’s supplier, Marand Precision Engineering.

Quickstep also supplies Boeing with several composite parts for the F-15 and F-18 military aircrafts.


* $60m to bring back international visitors to the regions hit hardest, including Tropical North Queensland.


* $128.5 million reform package to provide greater certainty around environmental protection and streamline assessments
* Deregulation using international safety standards to save businesses $136 million a year
* Waiving of fees and taxes for reef-based industries over 2022/23 financial year


* $365.3 million to support an extra 35,000 apprentices and trainees getting into jobs
* $1.2 billion over four years for an expanded Transition to Work employment service for disadvantaged youth
* $49.5 million over two years to boost aged care workforce skills
* Support for Indigenous boarding students
* Boost to schools funding


* $800 million over 10 years for strategic and scientific research and exploration in Antarctica
* $86 million forestry industry support
* $60 million for recycling modernisation