Winners and losers from Labor’s 2025 Australian election victory
Labor’s resounding victory at the weekend’s Federal Election, securing a second term with a strengthened parliamentary majority, defied predictions of a close contest, possibly reflects the idealism of a new generation of voters, and grants Labor a mandate to advance a socialist policy agenda.
Victoria’s fiscal challenges however are the result of a long-term Labor government running a socialist agenda that has now run out of other people’s money.
The socialist dream can only work when the state owns vast resource wealth. The huge electric vehicle (EV) fleet and wonderful childcare in some Lapland countries are possible because of the vast oil riches owned and mined by their nations. The Australian government needs to own the iron ore, rare earths, gas and other products in which we have a comparative advantage, if it wants to see its ‘fair go for everyone’ plan work. Australia can’t tax its way to a socialist idyll.
For investors, the election result presents a mix of opportunities and risks across multiple sectors. Below, we outline, at a very high level, some of the companies that might benefit, as well as those potentially in the firing line.
Transport: EV transition favours financiers, hurts parts suppliers
Labor’s vehicle efficiency policy, effective from July 2025, aligns Australia with global emissions standards, accelerating the shift to EVs. Auto financing groups like FleetPartners, Smartgroup Corporation, and McMillan Shakespeare and unlisted groups like Allied, as well as Pepper Money could benefit from increased demand for EV leasing. At the same time, dealers such as Eagers Automotive may see short-term gains.
While some investors suggest automotive parts suppliers could face long-term challenges as EVs become a larger part of the national fleet and require fewer replacement parts and less servicing, the reality is that the EV portion of Australia’s car fleet is just 0.8 per cent, so the shift to EVs will be irrelevant for possibly two decades. In any case the market is moving rapidly to hybrids, which potentially benefits the company.
Some analysts have also suggested ARB Corporation (ASX:ARB) could also be in the firing line, but the company’s dominance in aftermarket 4WD accessories and expansion overseas mitigates any presumed impact from a shift to EVS in Australia, which tend to be smaller and less appropriate for off-roading.
Fuel distributors such as Ampol and Viva Energy are also at risk, with Bloomberg projecting a gradual decline in petrol and diesel demand as EV adoption grows. A report from the Electric Vehicle Council (EVC) estimates that EV market share could reach 30 per cent by 2030, amplifying these structural shifts.
Energy and resources: green investments drive growth
Labor’s A$7.3 billion energy transition plan, including A$2 billion in credits for aluminium smelters adopting renewables and A$1 billion for green iron manufacturing under the Future Made in Australia plan, positions companies with sustainable assets for growth. Rio Tinto, South32, and Alumina Limited are positioned to capitalise marginally on the aluminium scheme, while BlueScope Steel, Fortescue Metals Group (ASX:FMG), and BHP could benefit marginally from green iron support.
The green energy transition could also benefit small-cap company Mars Group which has a construction services business working with transmission construction in regional Australia.
Meanwhile, AGL Energy, Australia’s largest energy retailer, is expected to gain from a A$4,000 household battery subsidy, which could stabilise electricity prices and boost renewable energy adoption. A Clean Energy Council report underscores that such subsidies could accelerate household battery installations by 25 per cent over the next five years, enhancing AGL’s market position.
Healthcare: diagnostics thrive, insurers face headwinds
Labor’s A$8.5 billion Medicare expansion, targeting 90 per cent bulk-billing for GP visits by 2030, and a A$573 million investment in women’s health are poised to increase patient referral volumes for diagnostic and pathology providers. Companies such as Sonic Healthcare, Healius, Australian Clinical Labs, and Integral Diagnostics could benefit from a jump in demand.
Conversely, a strengthened public healthcare system could challenge private health insurers like Medibank, particularly if premium indexation is eliminated, leading to margin compression.
Labor’s A$690 million policy (over four years) to lower PBS medicine costs from A$31.60 to A$25 is expected to boost pharmacy owners and wholesalers like Sigma and EBOS, who owns TerryWhite and Chemmart pharmacies, as reduced prices could drive higher prescription volumes.
A Pharmacy Guild of Australia report highlights that this policy may also enhance pharmacy accessibility in regional areas, further supporting these firms.
Housing: developers benefit, mortgage insurers squeezed
Labor’s A$10 billion pledge to construct 100,000 homes for first-time buyers and an A$800 million expansion of the Help-to-Buy scheme are set to stimulate the housing market.
Real estate developers such as Mirvac and Stockland, along with companies holding undeveloped residential land like Lifestyle Communities and Ingenia Communities Group (ASX:INA), could see increased property transaction volumes.
Labor’s soft approach to regulation of trade unions however could change the cost picture making the whole scheme less lucrative for companies and their shareholders.
The Help-to-Buy scheme, targeting singles earning under A$100,000 and couples under A$160,000, could also boost mortgage volumes for major banks like Commonwealth Bank (ASX:CBA) and Westpac, as well as smaller lenders like Pepper Money.
However, Labor’s decision to allow first home buyers to purchase with a five per cent deposit and waive lenders’ mortgage insurance for eligible applicants could threaten small-cap Helia Group and large-cap QBE Insurance (ASX:QBE), eroding a key revenue stream. The policy could reduce the cost of homeownership but may increase financial risks for buyers, indirectly affecting insurers’ long-term stability.
Supermarkets: regulatory pressures mount
Labor’s commitment to tackle “price gouging” and enforce a mandatory Food and Grocery Code of Conduct introduces uncertainty for major grocers like Woolworths (ASX:WOW), Coles, and Metcash. While the financial impact remains unclear, increased Australian Competition and Consumer Commission (ACCC) scrutiny could compress margins.
Aggressive regulatory measures could undermine sector performance, emphasising the need to balance consumer affordability with investment in supply chains and innovation. However, a A$157 million initiative to combat illicit tobacco could benefit grocers and service station operators like Viva Energy and Ampol by supporting legal retail sales.
Enhanced ACCC powers may also lead to broader price transparency, potentially benefiting consumers but challenging retailers’ pricing strategies.
Labor’s union roots could mean rising costs for contractors
Labor’s industrial relations reforms, including a proposed 2027 ban on non-compete clauses for workers earning below A$175,000 and the continuation of “same job, same pay” laws, will impact companies with significant contractor exposure. BHP Group (ASX:BHP), Downer EDI, Whitehaven Coal, and Qantas have already reported higher compliance costs.
The non-compete ban could affect up to three million workers in fields like sales, accounting, and IT, potentially increasing labour mobility but raising recruitment costs.
A Deloitte report suggests that these reforms could increase operational costs by two to three per cent for contractor-heavy industries like mining and construction.
Environment: EPA revival poses risks
Labor’s plan to revive a federal Environmental Protection Agency (EPA), previously shelved due to opposition from Western Australia, could impact the mining, construction, agriculture, and energy sectors if implemented.
Environmental regulations could raise compliance costs for companies like BHP Group (ASX:BHP) and Rio Tinto, particularly in resource-intensive regions. Environmental groups are optimistic about the EPA’s potential to enforce biodiversity protections, but industry bodies like the Minerals Council of Australia warn of potential delays in project approvals.
The Montgomery Small Companies Fund owns shares in ARB Corporation (ASX:ARB) and Ingenia Communities Group (ASX:INA). The Montgomery Fund and the Montgomery [Private] Fund owns shares in BHP Group (ASX:BHP), Rio Tinto (ASX:RIO), Fortescue Metals Group (ASX:FMG), Commonwealth Bank of Australia (ASX:CBA), QBE Insurance Group (ASX:QBE), and Woolworths (ASX:WOW). This article was prepared on 5 May 2025 with the information we have today, and our view may change. It does not constitute formal advice or professional investment advice. If you wish to trade ARB Corporation or Ingenia Communities Group, you should seek financial advice.
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.
Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
