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Budget 2022: Investing ‘megatrends’ revealed

Australian currency fanned out and a person touching a smart screen showing generic stock price tracking to represent investing.
Some investment opportunities were presented in the Federal Budget. (Source: Getty)

The Federal Budget this week laid the groundwork for a number of reforms that the Albanese Government is sure to expand upon when it delivers its next Budget in May.

And while cost-of-living pressures are growing, investing is still a good option for those looking to get their savings working harder for them.

Betashares chief economist David Bassanese said, while there was a growing likelihood of dark days ahead, there was still opportunity.

“For investors seeking out longer-term buying opportunities in more thematic exposures, the Federal Budget again demonstrated the direction of travel for a couple of megatrends reshaping the global economy,” Bassanese told Yahoo Finance.

“Ultimately, the prospect of recession – particularly in the United States – gives investors little room to move, except for fixed income and cash.

“In this climate, investors might look to more defensive exposures to protect their portfolio from the ongoing volatility on global markets.”

As we know, the big winners from the Budget were young families but there was also a huge focus on ‘going green’. This provides some great investment opportunities.

Electric vehicles

Bassanese said the Budget revealed a significant investment to facilitate the adoption of cheaper and cleaner transport.

“The new Driving the Nation Fund contains a range of measures to increase uptake of electric vehicles as demand for emissions-free transport continues to grow,” he said.

“This package follows the recent passage of the Inflation Reduction Act in the United States which, among other things, contained a number of measures to increase adoption of electric vehicles.

Clean energy

The Budget also provided funding to facilitate more deployment of cleaner forms of energy into the national energy grid.

“The Government’s Powering Australia package will fund community batteries and community-scale solar initiatives to improve access to cleaner energy,” Bassanese said.

“Further, the Federal Government’s Rewiring the Nation package is also aimed at modernising Australia’s energy grid and unlocking more renewable energy.”

Critical minerals

The Australian Government also upped its support for local critical minerals production.

“Recognising that critical minerals, such as those required for the ongoing energy transition, are in both strong demand and structurally constrained, the Government has funded a series of measures to support this industry,” Bassanese said.

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