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DIRECTORS : CHRIS BURRELL ROGER BURRELL ( Non-Exec ) IAN DAVEY ROBERT CHAN ELAINE ANDERSON ALICIA KENDALL MICHAEL BURRELL

ASSOCIATE DIRECTORS : JAMIE ELGAR SASKIA JO DYLAN KATZER BRUCE McLEARY

ASSOCIATES : SHAUN MINAHAN JAMIE KEMP WAYNE MATTHEWS

SENIOR INDEPENDENT DIRECTOR : GREG VICKERY AO email : clientcare @ burrell . com . au internet : www . burrell . com . au

The 2022 / 23 federal budget has delivered the third round of significant fiscal stimulus in as many years .

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The first in 2020 after the initial impact of COVID-19 ;

the second as the spread of Delta derailed the economic recovery ; and

� now the 2022 election-tinged instalment .

While most of the prior stimulus was arguably necessary , the question that will hang over the Government , would the budget have been any different if it wasn ’ t an election year ?

With cost-of-living expenses front of mind , households are the biggest beneficiaries , with most of the measures temporary . With recent data suggesting the labour market to grow further , the budget was designed to drive household consumption and underpin GDP growth . Government expenditure is forecast to grow by just 1.25 % in 2022 / 23 . which follows the massive fiscal support that is expected to drive growth of 7.25 % in 2021 / 22 . This is the first of many steps toward budget repair over the next decade . The booming economy does not require further government support , nor monetary settings at emergency levels .

With most of the budget ’ s cash splash temporary there is no incentive to make changes to our long-term company valuations . Beneficiaries will be those exposed to increased consumer spending and the reduction in the fuel excise . These include

APRIL - 2022 supermarkets and refiners . Select consumer discretionary companies will continue to benefit from the replacement of appliances from the flood damaged areas on the east coast and budget-driven demand .

The $ 18 billion boost to federal government infrastructure spending increases an already bloated pipeline to almost $ 140 billion . Listed beneficiaries include Downer and Seven Group . Ventia and Downer could benefit from increased defence spending .

Further fiscal stimulus on top of the estimated $ 250 billion in household savings is likely to add to inflationary pressures . Demand is further stimulated while supply issues are far from resolved and shortages are evident across the economy . Looking back a year ago , the world was on the cusp of an economic recovery . The worst of the COVID-19 pandemic looked over and economies were gradually re-opening . Inflation was rising but labelled transitory . Commentators hoped pandemic-disrupted supply chains would heal as demand subsided with reducing stimulus . Enter Delta and Omicron . The recovery was derailed , but optimism carried the day .

However , the global economic landscape changed dramatically with Russia ’ s invasion of Ukraine . The recovery is in jeopardy and hopes for transitory inflation , shattered . There are two major changes occurring which could mean inflationary pressures will be more persistent .

1 . the possible end to globalisation as we know it ; and

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