NEW ZEALAND WEEKLY ECONOMIC & POLITICAL UPDATE

Tuesday 23 September 2014

FOR IMMEDIATE RELEASE

www.ipredict.co.nz

www.electionresults.co.nz

CUNLIFFE MAY SURVIVE YEAR BUT DOOMED BY END OF 2015

NZ First is expected to take one seat off Labour once special votes are counted, maintaining the election-night result that John Key’s National Party will be able to govern alone, according to the combined wisdom of the 8000+ registered traders on New Zealand’s predictions market, iPredict. No electorate seats remain in doubt. Bill English will remain Finance Minister, Te Ururoa Flavell will become Maori Affairs Minister but the health portfolio appears up for grabs. David Cunliffe has a 50% probability of departing as Labour leader by the end of 2014 and an 83% probability of departing by the end of 2015. Grant Robertson is the favourite to succeed him. Mr Key has a 71% probability of remaining National Party leader at least until the end of 2016. Paula Bennett is favoured to succeed him should a vacancy arise. National is narrowly favoured to win the 2017 election.

Politics:

• Forecast party vote shares after special votes are counted (major and minor parties, adjusted to sum to 100%):

o National: 47.8% (down from 48.1% on election night)

o Labour: 24.8% (up from 24.7%)

o Green: 10.3% (up from 10.0%)

o NZ First: 9.4% (up from 8.9%)

o Conservatives: 4.0% (down from 4.1%)

o Internet-Mana: 1.4% (up from 1.3%)

o Maori Party: 1.2% (down from 1.3%)

o ACT: 0.7% (as election night)

o UnitedFuture: 0.2% (as election night)

• No electorate seats are in doubt

• Parliament is expected to be:

o National: 61 seats (as election night)

o Labour: 31 seats (down from 32 on election night)

o Green: 13 seats (as election night)

o NZ First: 12 seats (up from 11 on election night)

o Maori Party: 2 seats (as election night)

o ACT: 1 seat (as election night)

o UnitedFuture: 1 seat (as election night)

• There is a 50% probability David Cunliffe will depart as Labour leader by end of year and an 83% probability he will depart by the end of 2015

• Grant Robertson is favoured to become the next leader of the Labour Party (47% probability), followed by “other who WAS an MP on 30 September 2013” (24%), followed by “other who was NOT an MP on 30 September 2013” (12%), followed by Jacinda Ardern (5%) and David Parker (5%)

• John Key expected to remain National leader until at least the end of 2016 (71% probability)

• Paula Bennett is favourite to become National Party leader if a vacancy arises, (34% probability), followed by Steven Joyce (33%), Bill English (12%), Simon Bridges (8%), followed by “other” (7%), followed by Judith Collins (3%) and Hekia Parata (3%)

• Bill English will remain Finance Minister after Saturday’s election (at least a 95% probability)

• “Other” is expected to be the next Health Minister (43% probability), followed by Jonathan Coleman (40%) and Michael Woodhouse (18%)

• Te Ururoa Flavell is expected to be the next Maori Affairs Minister (94% probability), followed by “other” (6%)

• National expected to win 2017 General Election (50% probability, compared with 48% probability for Labour)

Economics:

• Quarterly GDP growth expected to be:

o 0.9% of GDP in the September quarter

o 1.1% in the December quarter

o 1.0% in the March 2015 quarter

o 1.1% in the June 2015 quarter

• Unemployment expected to be 5.5% in September quarter and 5.4% in the December quarter

• Current account deficit expected to be 3.5% of GDP in the September quarter and 4.0% of GDP in the December quarter

• Annual inflation expected to be:

o 1.3% to end of September quarter

o 1.6% to end of December quarter

o 1.8% to end of March 2015 quarter

o 2.2% to end of June 2015 quarter

• Official Cash Rate priced to be:

o 3.505% on 30 October

o 3.533% on 11 December

o 3.555% on 29 January

o 3.642% on 12 March

o 3.754% on 30 April

o 3.914 on 11 June

• Fiscal surplus expected to be:

o 0.14% of GDP in 2014/15

o 0.95% of GDP in 2015/16

o 1.98% of GDP in 2016/17

o 2.37% of GDP in 2017/18

Foreign Affairs/Constitution:

• New Zealand is not expected to be elected to the UN Security Council (with only 47% probability of appointment) nor is Helen Clark expected to be the next UN Secretary General (with only 38% probability of appointment)

• New Zealand is expected to hold a referendum on whether or not to become a republic by 2020 (65% probability however there is only a 40% probability of a New Zealand republic being approved by 2020

Notes:

• iPredict Ltd is owned by Victoria University of Wellington. Details on the company and its stocks can be found at www.ipredict.co.nz.

• The weekly economic and political update is prepared by Exceltium Ltd on a pro bono basis and is based on a snapshot taken at a random time each week. This week’s was taken at 11.16 am today.

ENDS

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