iPredict Election Update #45: Nats above 50%
Key Points:
* National hits 50% and Greens above 10%
* Brash now most vulnerable party leader
* Video Camera Surveillance (Temporary Measures) Bill to be passed
* Inflation and growth figures deteriorate
* Unemployment and OCR figures remain steady
* Fonterra payout predictions improveCommentary:
National and the Greens are at record-breaking highs, while Labour and Act are at record-breaking lows, according to this week’s snapshot from New Zealand’s prediction market, iPredict. National’s forecast party vote has reached 50.0%, and the Greens’ 10.3%, meaning 63 and 13 MPs respectively, while Labour have dropped to 28.1% and Act 2.0%, meaning just 36 and 3 MPs respectively. With the exception of Phil Goff’s Mt Roskill electorate, Labour is now expected to reduce its majorities in all of the electorates iPredict measures In economics, inflation and growth figures worsen, while unemployment and the OCR remain unchanged, the Fonterra Payout for 2011/12 has improved slightly.
Economic Context
Expectations for GDP growth have deteriorated this week with the release of lower-than-expected June quarter growth figures. The market predicted June quarter growth to be 0.5%, while the actual GDP growth figure was just 0.1%. Growth is expected to be 0.6% for the September quarter (down from 0.7% last week), 0.6% for the December quarter (steady) and 0.4% for the March quarter (down from 0.6% last week).
Inflation expectations have also deteriorated this week, with annual inflation expected to be 5.0% in the September quarter (steady), 2.8% in the December quarter (up from 2.7% last week) and 2.6% in the March 2012 quarter (up from 2.5% last week).
The market expects prices for 91 unleaded petrol will be $2.06 for the week ending 30 September 2011 (down from $2.08 last week), $2.09 for the week ending 28 October 2011 (steady), $2.08 for the week ending 25 November (up from $2.07 last week), and $2.06 for the week ending 30 December (steady).
Fonterra’s final payout for the 2010/11 year was announced last week at a record $8.25 per kilogram of milk solids before retentions, just above the iPredict’s market prediction of $8.17. The payout in 2011/12 is expected to be $7.44 (up from $7.41 last week), the 2012/13 payout $7.74 (steady), the 2013/14 payout $7.41 (steady) and the 2014/15 payout $7.41 (also steady).
OCR forecasts have remained steady this week. The market predicts that the Reserve Bank Governor Alan Bollard will hold off an increase in the OCR till March 2012, when it will rise to 2.75%, and then again in April to 3.00% and will remain steady through June.
The expected 90-day bank bill rate for 1 December is 2.95% (down from 3.08% last week).
Results for the Current Account deficit have also been made available this week, the actual June quarter current account deficit was 3.7% of GDP, while last week’s prediction was 4.00% of GDP. The market predicts 4.14% of GDP for the year to September (down from 4.69% last week) and 3.13% of GDP for the year to December (down from 4.29% last week).
Parties & Personnel
All current leaders of parliamentary parties have at least a 92% probability of remaining in their positions until the election. The most vulnerable is now Act Party leader Don Brash, but with the market forecasting just a 8% probability he will be replaced prior to the election. There is a 22% probability (down from 39% last week) that there will be changes to the top ten of Labour’s party list, announced on 10 April 2011, when it is registered with the Electoral Commission.
The market forecasts Annette Sykes has an 87% probability (up from 86% last week) of being the highest ranked person on the Mana party list other than Party Leader Hon Harawira while Don Nicolson has a 34% probability (up from 24% last week) that he will be the highest ranked person on the ACT party list (other than Brash, Banks, and Boscawen).
There is a 10% probability that a Minister will depart before the election, while the market suggests Conway Powell (the next candidate on National’s list) has just a 2% chance of entering Parliament this term. The market also predicts there is a 13% probability that Trevor Mallard will announce he will not stand next election.
Key Electorate Contests
The probability that National will beat last election’s majority in Tauranga is 89% (down from 90% last week), in Helensville 69% (steady), North Shore 52% (down from 63% last week), Bay of Plenty 50% (steady), Rangitikei 80% (up from 23% last week) and Ilam 19% (down from 21% last week). In Clutha Southland the chance that National will beat their majority is 78%, in Rangitikei 26%, and in Rodney just 22%.
The market is predicting that Labour will reduce its majorities in a number of safe seats. The probability that Labour will increase its majority in Dunedin South is steady at 48%, Mount Roskill 53% (steady) in Hutt South 37% (down from 57% last week). Labour has a 41% probability of increasing Jim Anderton’s 2008 majority in Wigram (down from 60% last week). In Te Atatu the chance that Labour will beat their 2008 majority is 42%, in Manurewa 48%, and in New Lynn, Labour’s outlook is bleak with just 18%.
Act is also expected to reduce their 2008 majority in Epsom with a just a 26% probability it will be increase.
Act has a slightly reduced probability of winning in Epsom this week with the market forecasting an 80% (down from 82% last week) probability that the seat will be won by a candidate other than a National candidate or incumbent Act MP Rodney Hide.
In Ohariu, the odds of United Future’s Peter Dunne retaining the seat has improved markedly this week with the market now forecasting he has a 85% probability of being re-elected (up from 78% last week).
New Zealand First remains below MMP’s 5% threshold, with a forecast 3.6% vote share (down from 4.0% last week). Party leader Winston Peters has just a 15% probability of returning to Parliament (up from 15% last week).
Expectations that Mana Party leader Hone Harawira will retain the Te Tai Tokerau seat in the General Election have decreased to 83% (from 84% last week).
Tamaki-Makaurau continues to be a tight race with Maori Party Co-Leader Dr Pita Sharples predicted to win. Dr Sharples is now sitting at 50.0% probability (steady) with Labour’s Shane Jones marginally behind at 48.3% (also steady).
Maori Party co-Leader Tariana Turia is still expected to retain Te Tai Hauauru (93%, steady), and her colleague Te Ururoa Flavell is expected to retain Waiariki (80%, down from 82%$ last week).
For the Labour Party, Nanaia Mahuta is expected to retain Hauraki-Waikato (86%, down from 87% last week) and Labour’s position in Ikaroa-Rawhiti (currently Parekura Horomira’s seat) is now at 74% (down from 81% last week)
Te Tai Tonga remains forecast to change hands, with a 73% probability it will be won by Labour’s Rino Tirikatene from the Maori Party’s Rahui Katene (down from 74% last week).
In marginal electorates other than those mentioned above, the probability National’s Jonathan Young will retain New Plymouth has increased markedly to 85% (from 72% last week). There is a 77% probability that National’s Nikki Kaye will retain Auckland Central (up from 75% last week) and a 82% likelihood National’s Paula Bennett will retain her Waitakere seat (up from 73% last week). In the Te Atatu electorate, Labour’s Phil Twyford has a 72% likelihood of winning the seat (steady). Damien O’Connor is expected to win back West Coast-Tasman for Labour (53%, down from 57% last week), and Iain Lees-Galloway has a 70% probability of victory in Palmerston North (down from 72% last week).
On a seat-by-seat basis, National is expected to win 40 electorate seats, Labour 24, the Maori Party 3 (up from 2 last week), and Act, United Future and the Mana Party 1 seat each.
Party Vote, and Election Results
Forecast party vote shares are now: National 50.0% (up from 49.0% last week) Labour 28.1% (down from 30.2% last week), the Greens 10.3% (up from 8.0% last week), Act 2.0% (down from 4.1% last week), New Zealand First 3.6% (down from 4.0% last week), the Maori Party 1.4% (down from 1.5% last week), the Mana Party 1.4% (up from 1.0% last week), UnitedFuture 1.0% (down from 1.6% last week), the Conservative Party 0.9% (steady), and the New Citizen Party 0.4% (up from 0.5% last week).
Based on this data, and the electorate results above, Parliament would be as follows: National 63 MPs, Labour 36 MPs, the Greens 13 MPs, Act 3 MPs, the Maori Party 3 MPs, the Mana party 2 MPs and UnitedFuture with just 1 MP. There would be 121 MPs, requiring a government to have the support of 61 MPs on confidence and supply, meaning John Key’s National Party would be able to govern alone.
Overall the market indicates a 94% probability there will be a National Prime Minister after the election (up from 93% last week).
MMP Referendum and Miscellaneous
A new stock this week predicts that the Video Camera Surveillance (Temporary Measures) Bill has an 84% chance of being given Royal assent before the General Election.
The probability New Zealanders will elect to retain the MMP voting system in the referendum to be held on Election Day has remained steady at 85% (up from 84% last week).
iPredict is owned by Victoria University of Wellington. Details on the company and its stocks can be found at www.ipredict.co.nz The company is providing full election coverage this year, with contract bundles for the party vote and for every electorate race in the country now available for trading, along with other contract bundles on a wide range of economic, political and social issues. The weekly political snapshot is taken at a random time each week to avoid market manipulation by political parties or activists. This week’s was taken at 9:10am today.