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iPredict Election Update #49: Goldsmith picked for Epsom

28 October 2011

Key Points:

* Goldsmith now picked in Epsom making National's position precarious
* If NZ First reaches 5%, Goff could govern
* National picked for 2014
* Auchinvole edges ahead of O'Connor in West Coast-Tasman
* Maui pipeline to be fixed by Tuesday
* Inflation and petrol price expectations fall
* Unemployment and growth forecasts remain steady
* Current account deficit expectations worsen
* iPredict performs well against OCR, candidacy, and growth results


Act's position in Parliament is now looking tenuous with the market narrowly forecasting a win for National's Paul Goldsmith in Epsom, according to this week's snapshot by New Zealand's online prediction market, iPredict. With Winston Peters' New Zealand First still below the 5% threshold, National could still govern with the support of UnitedFuture, which is picked to return to Parliament through Ohariu, but its position is now more precarious than it has been for some time. In economics, Reserve Bank Governor Alan Bollard is now expected to hold off a rise the OCR until April 2012, with expectations for petrol prices and inflation both down, while unemployment and growth forecasts remain steady. The market expects the Maui pipeline to be fixed by Tuesday. With a number of stocks closing in the past week, iPredict has proven itself to be an accurate forecasting market, predicting the candidate selected for Tamaki, the OCR rate remaining unchanged, and GDP growth results.

Economic Context

Expectations for GDP growth have remained steady this week. Growth is expected to be 0.5% for the September 2011 quarter, 0.6% for the December 2011 quarter, and 0.4% for the March 2012 quarter.

Expected unemployment has also remained steady this week. Unemployment remains forecast to be 6.4% in the September quarter, 6.2% in the December quarter, and 6.2% in the March 2012 quarter.

Inflation figures show that iPredict's forecast of 5.0% was only marginally above the actual figure of 4.6% released earlier this week. The inflation expectations has improved further this week, with annual inflation expected to be 2.6% for the December quarter (down from 2.8% last week), and 2.5% in the March 2012 quarter (steady).

Expected petrol prices have reduced this week, being $2.04 for the week ending 28 October 2011 (from $2.08 last week), $2.09 for the week ending 25 November (from $2.10 last week) and $2.08 for the week ending 30 December (steady).

The market believes there is a 65% probability that normal service on the Maui pipeline will resume by the end of Monday 31 October, although there remains a 14% probability the problem will remain unresolved after Wednesday.

Fonterra's expected final payouts have reduced markedly this week. Fonterra's final payout for the 2011/12 is expected to be $6.96 (down from $7.35 last week), the 2012/13 payout $7.74 (steady), the 2013/14 payout $7.42 (steady) and the 2014/15 payout $7.42 (steady).

As forecast by iPredict, New Zealand's Official Cash Rate remained unchanged at 2.50% this week. This week's snapshot suggests that the Reserve Bank Governor Alan Bollard will hold off an increase the OCR till April 2012 when it will rise to 2.75%.

The expected 90-day bank bill rate for 1 December is 2.74% (down from 2.80% last week).

Current account deficit expectations have worsened this week. The market predicts a deficit of 4.14% of GDP for the year to September (up from 4.08% last week) and 3.22% of GDP for the year to December (up from 3.18% last week).

Parties & Personnel

In the tight and uncertain race for candidacy in the safe blue seat of Tamaki, iPredict once again proved itself and accurate indicator of outcome. As predicted all last week, Simon O'Connor won the nomination.

All current leaders of parliamentary parties have at least a 94% probability of remaining in their positions until the election. There is a 7% probability (down from 12% last week) that there will be changes to the top ten of the Labour Party list, announced on 10 April 2011, when it is registered with the Electoral Commission. There is an 11% probability that a Minister will depart before the election.

Annette Sykes continues to be forecast to be the highest ranked person on the Mana Party list other than Party Leader Hone Harawira (96% probability up from 89% last week).

Key Electorate Contests

Act is in trouble in Epsom. The party now has an 89% probability of a reduced majority in Epsom, and National's Paul Goldsmith is now expected to win the seat (48.3% probability, compared with 44.6% for Act's John Banks. Labour's David Parker has just a 3.7% chance of winning the seat.
In West Coast-Tasman, National's Chris Auchinvole now has a 51.7% probability of winning the seat (up from 48.3% last week) making him the lead contender to win against Labour's Damien O'Connor on 48.3% (down from 50.0% last week).

In Ohariu, the odds of United Future's Peter Dunne retaining the seat have remained steady this week with the market forecasting he has an 80% probability of him being re-elected.

In other vital contests, expectations that Mana Party leader Hone Harawira will retain his Te Tai Tokerau seat have increased slightly this week, with Mr Harawira now having an 82% probability of prevailing, up from 81% last week.

The probability Maori Party co-leader Pita Sharples will win Tamaki-Makaurau has increased slightly this week. Dr Sharples now has a 78% probability of retaining the seat (up from 74% last week) over Labour's Shane Jones at 22% (down from 23% last week).

Maori Party co-Leader Tariana Turia is still expected to retain Te Tai Hauauru (89%, down from 93% last week), and her colleague Te Ururoa Flavell is expected to retain Waiariki (80%, up from 79% last week).

For the Labour Party, Nanaia Mahuta is expected to retain Hauraki-Waikato (85%, steady) and Labour's hold on Ikaroa-Rawhiti has improved marginally (81%, from 80% last week)

Te Tai Tonga remains forecast to change hands, with a 65% probability it will be won by Labour's Rino Tirikatene from the Maori Party's Rahui Katene (down from 70% last week).

In marginal electorates other than those mentioned above, the probability National's Jonathan Young will retain New Plymouth is 73% (down from 74% last week). There is a 76% probability that National's Nikki Kaye will retain Auckland Central (up from 72% last week) and an 82% likelihood National's Paula Bennett will retain her Waitakere seat (up from 80% last week). In the Te Atatu electorate, Labour's Phil Twyford has a 78% likelihood of winning the seat (up from 73% last week), and Iain Lees-Galloway has a 69% probability of victory in Palmerston North (up from 66% last week).

In terms of majorities, the probability that National will beat last election's majority in Rangitata is 81% (steady), in Tauranga 78% (down from 79% last week), in Clutha Southland 78% (steady), and in Helensville 66% (down from 69% last week). The probability that National will decrease last election's majority in Ilam is 82% (steady), in Rodney 78% (steady), in Rangitikei 76% (steady), in North Shore 60% (steady), and in the Bay of Plenty is 58% (up from 57% last week).

The probability that Labour will beat last election's majority in Dunedin South is 52%, and in Wigram 50%. The Probability that Labour will decrease last election's majority in Te Atatu is 88% (steady), in New Lynn is 83% (down from 88% last week), in Phil Goff's Mt Roskill 61% (up from 43% last week), and in Manurewa 52% (steady).

While he has not announced which if any electorate he will stand in, New Zealand First leader Winston Peters has just an 18% probability of returning to Parliament (steady).

On a seat-by-seat basis, National is expected to win 42 electorate seats (up 2), Labour 23 (down 1), the Maori Party 3, United Future and the Mana Party 1 seat each, Act 0 (down 1).

Party Vote, and Election Results

Forecast party vote shares are now: National 46.0% (up from 45.0% last week), Labour 30.2% (up from 29.7% last week), the Greens 10.5% (down from 11.1% last week), New Zealand First 4.3% (down from 4.7% last week), Act 3.1% (down from 3.6% last week), UnitedFuture 1.5% (down from 1.9% last week), the Maori Party 1.3% (steady), the Mana Party 1.3% (up from 1.0% last week), the Conservative Party 0.9% (steady), and the New Citizen Party 0.4% (steady).
Based on this data, and the electorate results above, Parliament would be as follows: National 60 MPs, Labour 40 MPs, the Greens 14 MPs, the Maori Party 3 MPs, UnitedFuture and the Mana Party 2 MPs each. There would be 121 MPs, requiring a government to have the support of 61 MPs on confidence and supply. John Key's National Party would be able to govern with UnitedFuture or with the Greens or the Maori Party.

Given New Zealand First's proximity to MMP's 5% threshold, iPredict has also analysed what might happen should New Zealand First win 5.0% of the vote. Under this scenario, Parliament would be as follows: National 57 MPs, Labour 38 MPs, the Greens 13 MPs, New Zealand First 6 MPs, the Maori Party 3 MPs, UnitedFuture and the Mana Party 2 MPs each. There would be 121 MPs, requiring a government to have the support of 62 MPs on confidence and supply meaning Phil Goff's Labour Party could govern with the Greens, New Zealand First, the Maori Party and the Mana Party.

Overall, however, the market indicates a 93% probability there will be a National Prime Minister after the election (steady).

MMP Referendum and Miscellaneous

The probability New Zealanders will elect to retain the MMP voting system in the referendum to be held on Election Day has increased to 89% (up from 87% last week).

New stocks launched this week forecast the result of the 2014 election, regardless of the result of the 2011 election. Early trading suggests a 53% probability of a National Prime Minister after the 2014 General Election is 53%, a 43% probability of a Labour Prime Minister and a 4% probability of a Prime Minister from another party.

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 8:06am today.


© Scoop Media

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