Tuesday's Federal Budget contained some big surprises but also some good news for ASX shares. There were tax cuts, wage subsidies and increased fiscal spending to try and keep many sectors of the economy ticking along.
Investors might be wondering how they can make the most of the Federal Budget through their investing next year. Here are a few of my favourite ASX shares to buy to take advantage of the latest government outlook.
1. SEEK Limited (ASX: SEK)
The Seek share price has been rocketing higher since Tuesday as investors pile into the employment classifieds business.
A weak economy is not good for Seek as it generates earnings from job listings and advertising. That's the main reason why the Seek share price was hammered in the March bear market.
However, investors have a reason to be bullish on the ASX share given strong incentives to boost employment levels. A quick economic rebound could put Seek shares back in the buy zone in early 2021.
2. Woolworths Group Ltd (ASX: WOW)
Woolworths is one of Australia's largest companies with strong ties to essential and discretionary retail.
That means the Government's $74 billion JobMaker scheme could be a real winner for investors. The ASX conglomerate share has been climbing since Tuesday thanks largely to the large wage subsidies on offer for hiring unemployed youth.
That could see Woolworths slash its employment costs across its major businesses that often hire young workers such as Bunnings and its Woolworths Supermarkets business.
If that kicks in soon, we could see Woolworths post a handy dividend in FY21 on the back of stronger earnings.
3. Lendlease Group (ASX: LLC)
On top of the subsidies and employment boosters, the Federal Budget earmarked $10 billion of additional funds for infrastructure and construction.
That's good news for Lendlease which is a leading player in that sector and already has several major government contracts.
The ASX infrastructure share has been smashed in 2020 but this could be the start of a turnaround. Increased infrastructure spending could benefit Lendlease and lead to stronger earnings in the years ahead.
Foolish takeaway
These are just a few of my favourite ASX shares that I think can outperform thanks to Tuesday's Federal Budget announcement.
