Labor spending boost: the ASX-listed companies tipped to shine

A bigger-spending Albanese government will boost some stocks and sectors more than others. See our share analysts’ top 10 list.

Anthony KeanePersonal finance writer

3 min read

May 12, 2025 - 5:00AM

The Australian Business Network

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Labor’s strong election victory, ending fears of a chaotic minority government, has failed to fire up the stock market, but analysts say that could soon change.

The first trading week under Labor was flat, in line with global market movements, with the S&P/ASX 200 index closing just 0.1 per cent lower for the week as Trump trade war fears linger.

Share specialists believe the government’s big spending polices will boost consumer activity, assisted by expected Reserve Bank interest rate cuts.

Ten Cap founder and portfolio manager Jun Bei Liu said the election result was “a positive for the market”.

“I think the market likes stability, especially a government with a clear majority, even though the policy agenda is not significantly different,” she said.

Ten Cap’s Jun Bei Liu says government stability is good for shares. Picture: Nikki Short

Ms Liu said government support for housing was good for stocks including construction materials business Boral and lifestyle communities company Ingenia Communities Group.

She said Labor’s history of higher spending would be good for the consumer discretionary space with “a lot more spending for there”.

“JB Hi-Fi could potentially do better, and you also have furniture-related retailers including Harvey Norman, Nick Scali and Adairs.

“Metcash has the Total Tools business – they might do better.”

Leyland Private Asset Management senior portfolio manager Sean Conlan said he expected the Albanese government to benefit shares.

“Everything is looking rosy as far as we are concerned,” he said.

“The electorate has voted for more of the same as opposed to the unknown.”

The unknowns around Donald Trump’s tariffs and trade war with China remained, but could benefit Australian consumers and borrowers, Mr Conlan said.

“China will start looking for markets to dump products, and that will have an impact on inflation which should lead to lower interest rates,” he said.

Mr Conlan said Labor had no plan for federal budget repair, so its policies would be “more positive for household consumption and will be a bigger contribution to Australia Inc profits in the near-term”.

“The ALP should be better for companies that benefit from rising household spend including the discretionary retailers, retail REITs and gaming stocks,” he said.

Mr Conlan noted JB H-Fi and Super Retail Group as beneficiaries, and said higher health spending would be a modest positive for Sonic Healthcare and Healius.

Macquarie Research says Labor’s housing policies plus expected Reserve Bank interest rate cuts are seen as positive for housing and consumer stocks including Wesfarmers, Stockland Corp, Mirvac Group, JB Hi-Fi and Super Retail Group, whose brands include Supercheap Auto, Rebel, BCF and Macpac.

Baker Young managed portfolio analyst Toby Grimm said there was not a great deal of difference between the major parties coming into the election, so the stability afterwards was “a favourable outcome”.

Childcare stocks such as G8 Education could be winners under Labor. Picture: iStock

“I don’t think there’s an expectation of a huge amount of change – it’s the devil you know continuing as you know,” he said.

“We will wait and see whether or not there are policy targets and directions they head in.”

Mr Grimm said Labor was typically a bigger spender on social welfare, health and education.

“IDP Education is viewed as a positive – the perception is Labor’s immigration policy will be less detrimental than the Coalition would have been,” he said. IDP assists foreign students.

“Childcare is another area expected to be a beneficiary,” Mr Grimm said. G8 Education was a direct participant with its hundreds of childcare centres, while on the childcare property side Charter Hall Social Infrastructure REIT could benefit, he said.

“The private hospital side of things is possibly going to be a beneficiary on the grounds that Labor is historically a bigger spender on health, albeit in the public sector. They could shift some of the public burden to the private sector and to some extent assist the private system to remain viable.”