State budgets are normally ho-hum affairs for ASX investors, but the $23.3 billion record deficit in the Victorian state budget will deliver benefits to some ASX stocks.
The bungled handling of the initial COVID‐19 response to the pandemic means the state's economy will suffer this financial year, reported the Australian Financial Review.
But growth should rebound strongly in FY21 with the Andrews government spending big to create jobs to stimulate its economy.
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ASX construction stocks the biggest winners
The biggest winners are those involved in infrastructure construction. The state is coughing up close to $10 billion on rail projects like the Melbourne Airport Rail Link.
Then there's another $2 billion set aside to upgrade and build hospitals, including the redevelopment of the Warrnambool Base Hospital.
The construction boom doesn't stop there. The AFR reported that Victoria is committing $5 billion to build 12,000 new public housing homes in the next four years. Of these 1,000 of which will be reserved for indigenous Australians, 1,000 for domestic violence victims, and 2,000 for those with mental illness.
ASX stocks best placed to benefit
A number of ASX engineering outfits will be excited if they can win any of the work. This includes the Downer EDI Limited (ASX: DOW) share price, and Lendlease Group (ASX: LLC) share price.
The Seven Group Holdings Ltd (ASX: SVW) share price could also get a boost as rental demand for heavy machinery is likely to increase.
Speaking about hospitals, the Paragon Care Ltd. (ASX: PGC) share price may also experience renewed investor interest. Paragon supplies many of the equipment and consumables used in hospitals, including beds.
Regional tourism uplift
There is also good news for the Webjet Limited (ASX: WEB) share price. The state is pumping $465 million to promote domestic tourism. This comes on top of a program that would give 120,000 people $200 vouchers if they spent $400 or more on accommodations and/or tourist attractions.
Webjet offers an online hotel booking site and that's why its seen to be better placed than rival Flight Centre Travel Group Ltd (ASX: FLT) in this regard.
No free meals from the Victorian budget
But it's not all good news for business. The Collins Foods Ltd (ASX: CKF) share price and Domino's Pizza Enterprises Ltd. (ASX: DMP) share price might come under a bit of pressure.
Victoria will be the first in the nation to introduce sick leave for casual workers as it trials a two-year program. Business will ultimately fund the program for 600,000 workers through industry levies.
Fast food businesses rely heavily on casual staff and their relatively skinny margins will get squeezed more with the trial.
