* Act once again forecast to win Epsom, but still highly marginal
* Labour again forecast to win West Coast-Tasman, after Damien O’Connor featured in party’s opening advertisement
* National, Labour and Green party votes improve
* Probability Key will win 2011 election down to 90%, but with an improving probability of winning again in 2014
* Inflation forecasts worsen markedly
* Other economic indicators remain broadly unchanged
* June 2012 economics stocks now trading
After slipping behind last week, John Banks is once again forecast to win Epsom but the electorate remains highly marginal, according to this 50th weekly snapshot by New Zealand’s online prediction market, iPredict. The snapshot also suggests that, after being featured prominently in the Labour Party’s opening campaign advertisement on Friday night, Damien O’Connor is again forecast to take West Coast-Tasman, while both National and Labour’s forecast party votes both edged up following the release of the campaign openers. In cconomics, inflation forecast are up while other economic indicators (GDP, unemployment, the current account deficit and future Fonterra payouts) have remained broadly the same. Stocks have been launched this week for June 2012 quarter GDP, unemployment, inflation, and the current account deficit.
As iPredict forecast last week, normal service on the Maui pipeline resumed by Monday 31 October.
Expectations for GDP growth have improved fractionally since the last snapshot. Growth is expected to be 0.6% for the September 2011 quarter (up from 0.5% last week), 0.6% for the December 2011 quarter (steady), 0.4% for the March 2012 quarter (steady), and 0.5% in the new June 2012 quarter stock.
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, 6.2% in the March 2012 quarter, and 6.2% in the new June 2012 quarter stock.
Inflation expectations have worsened markedly this week, with annual inflation expected to be 3.1% for the December quarter (up from 2.6% last week), 2.6% in the March 2012 quarter (up from 2.5% last week), 2.5% in the new June 2012 quarter stock, and 2.5% in the new September 2012 Stock.
Expected petrol prices have fallen marginally this week, being $2.03 in the yet to be released prices for the week ending 28 October 2011 (down from $2.04 last week), $2.08 for the week ending 25 November (from $2.09 last week) and $2.08 for the week ending 30 December (steady).
Fonterra’s expected final payouts have increased marginally this week. Fonterra’s final payout for the 2011/12 is expected to be $6.97 (up from $6.96 last week), the 2012/13 payout $7.74 (steady), the 2013/14 payout $7.42 (steady) and the 2014/15 payout $7.42 (steady).
OCR forecasts remain unchanged, suggesting 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 2.80% (up from 2.74% last week).
Current account deficit expectations remained steady this week. The market predicts a deficit of 4.14% of GDP for the year to September, 3.22% of GDP for the year to December and 3.37% of GDP in the new March 2012 stock.
Parties & Personnel
All current leaders of parliamentary parties have at least a 95% probability of remaining in their positions until the election. There is just a 2% probability (down from 7% 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 (98% probability up from 96% last week).
Key Electorate Contests
Act is marginal in Epsom. The party has a 90% probability of a reduced majority in Epsom, though is now predicted to win the with a 52.9% probability (up from 44.6% last week), with National’s Paul Goldsmith not far behind with a 43.4% probability (down from 48.3% last week). Labour’s David Parker continues to have just a 3.7% probability of winning the seat.
West Coast-Tasman continues to be a close, with Labour’s Damien O’Connor now forecast to win the electorate with a 51.7% probability (up from 48.3% last week). National’s Chis Auchinvole is close behind on a 48.3% probability (down from 51.7% last week).
In Ohariu, the odds of United Future’s Peter Dunne retaining the seat have improved this week with the market forecasting he has an 83% probability of being re-elected (up from 80% last week).
In other vital contests, expectations that Mana Party leader Hone Harawira will retain his Te Tai Tokerau seat have fallen slightly this week, from 82% to 80% probability.
The probability Maori Party co-leader Pita Sharples will win Tamaki-Makaurau has slipped slightly from 78% to 76% probability, with Labour’s Shane Jones at 23%, up from 22% last week.
Maori Party co-Leader Tariana Turia is still expected to retain Te Tai Hauauru (89%, steady), and her colleague Te Ururoa Flavell is expected to retain Waiariki (80%, steady).
For the Labour Party, Nanaia Mahuta is expected to retain Hauraki-Waikato (85%, steady) and Labour’s hold on Ikaroa-Rawhiti has improved marginally (82%, from 81% last week).
Te Tai Tonga remains forecast to change hands, with a 70% probability, up from 65% last week, that it will be won by Labour’s Rino Tirikatene from the Maori Party’s Rahui Katene.
In marginal electorates other than those mentioned above, the probability National’s Jonathan Young will retain New Plymouth is 73% (steady). There is a 75% probability that National’s Nikki Kaye will retain Auckland Central (down from 76% last week) and an 83% likelihood National’s Paula Bennett will retain her Waitakere seat (up from 82% last week). In the Te Atatu electorate, Labour’s Phil Twyford has a 78% likelihood of winning the seat (steady), and Iain Lees-Galloway has a 66% probability of victory in Palmerston North (down from 69% last week).
In terms of majorities, the probability that National will beat last election’s majority in Rangitata is 81% (steady), in Tauranga 80% (up from 78% last week), in Clutha Southland 78% (steady), and in Helensville 65% (down from 66% last week). Seats where National is forecast to suffer reduced majorities are Ilam (83%, compared with 82% last week), Rodney 78% (steady), Rangitikei 76% (steady), North Shore 60% (steady) and the Bay of Plenty 60% (up from 58% last week).
The probability that Labour will beat last election’s majority in Wigram is 53% (from 50% last week), and in Dunedin South 52% (steady). Labour’s majority is expected to decrease in Te Atatu (88%, steady), New Lynn is (82%, down from 83% last week), Mt Roskill (55%, down from 61% last week) and Manurewa (52%, steady).
While he has not announced which if any electorate he will stand in, New Zealand First leader Winston Peters has just a 17% probability of returning to Parliament (steady).
On a seat-by-seat basis, National is expected to win 40 electorate seats (down 2), Labour 24 (up 1), the Maori Party 3, United Future and the Mana Party 1 seat each, and Act 1 seat (up 1).
Party Vote, and Election Results
Forecast party vote shares are now: National 46.5% (up from 46.0% last week), Labour 31.0% (up from 30.2% last week), the Greens 11.1% (up from 10.5% last week), New Zealand First 4.2% (down from 4.3% last week), Act 3.1% (steady), the Mana Party 1.3% (steady), UnitedFuture 1.2% (down from 1.5% last week), the Maori Party 1.2% (down from 1.3% last week), the Conservative Party 1.0% (up from 0.9% last week) and the New Citizen Party 0.4% (steady).
Based on this data, and the electorate results above, Parliament would be as follows: National 58 MPs, Labour 39 MPs, the Greens 14 MPs, Act 4 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. John Key’s National Party would be able to govern with the Act Party or the Maori Party.
Given New Zealand First’s proximity to MMP’s 5% threshold and Act’s marginal chances in Epsom, iPredict has also analysed what might happen were New Zealand First to win 5.0% of the vote and John Banks lose Epsom. Under this scenario, Parliament would be as follows: National 58 MPs, Labour 38 MPs, the Greens 14 MPs, New Zealand First 6 MPs, the Maori Party 3 MPs, the Mana Party 2 MPs, and UnitedFuture just 1 MP. There would be 122 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, the market indicates a 90% probability there will be a National Prime Minister after the election (down from 93% last week).
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 decreased to 87% (from 89% last week).
Regardless of the result of the 2011 election, the probability that there will be a National Prime Minister in the 2014 election is 60% (up from 53% last week), the chances that there will be a Labour Prime Minister is 39% (down from 43%), and the probability of a Prime Minister from another party is 5% (up from 4% last week).