AUSTRALIAN ELECTION NEWSLETTER #1:

12 June 2012

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Key Points:

• Federal Election expected in Q1 2013

• Gillard to be replaced as ALP leader before election, with Rudd, Shorten and Smith leading contenders

• Abbott safe as Liberal leader against Turnbull

• Coalition to beat ALP 52% to 48% on two-party preferred basis

• 80% probability of Liberal Prime Minister

• Contracts to be launched today forecasting results in Blair (Qld), Chisholm (Vic), Hasluck (WA), Lingiari (NT) and Richmond (NSW)

Introduction

This is first newsletter summarising forecasts by the 6900 registered traders on New Zealand’s online predictions market, iPredict, of the results of the next Federal Election in New Zealand’s largest trade and investment partner, Australia. Anyone else who wants to trade can do so by signing up for free at https://www.ipredict.co.nz/app.php?do=register.

The newsletter will be produced periodically, with greater frequency as we move closer to the election, which must be held by 30 November 2013.

Each newsletter will provide a snapshot of market forecasts, taken at a random time to avoid manipulation by political parties and activists. Today’s was taken at 10.00 am (New Zealand Time).

In addition, bundles of contracts for races in different electoral divisions will be launched before each newsletter. The first five are Blair (Qld), Chisholm (Vic), Hasluck (WA), Lingiari (NT) and Richmond (NSW). These can be traded from 2.30 pm today (New Zealand Time) at https://www.ipredict.co.nz/app.php?do=browse&cat=318.

Election Date

There is currently no clear consensus among iPredict’s 6900 traders of when the next Australian Federal Election will be held. There is a 31% probability it will be held in Q2 2013, a 27% probability it will be held in Q1 2013, a 20% probability it will be held in Q4 2012 and a 9% probability it will be held in Q4 2013. When all prices are analysed, the best estimate is an election in Q1 2013.

Party Leaders

There is a 66% probability Prime Minister Julia Gillard will be replaced as leader of the Australian Labor Party (ALP) before the election but no clear consensus on her successor. While Ms Gillard has a 34% probability of being ALP leader on nomination day, there is a 27% probability former Prime Minister Kevin Rudd will have the job, a 17% probability it will go to Employment and Workplace Relations Minister Bill Shorten and a 16% probability it will go to Defence Minister Stephen Smith. There is a 5% probability Ms Gillard will depart as Prime Minister this month.

Risks to Opposition Leader Tony Abbott are not as acute. The market indicates an 83% he will be leader of the Liberal Party on nomination day and a 17% probability the leader will be former leader Malcolm Turnbull.

Forecast Outcome

The ALP is currently expected to win 37% of first preference votes and the Green Party 12%. The Liberal Party is currently expected to win 31% of first preferences, the Liberal National Party of Queensland 10% and the Australian National Party 9%.

On a two-party preferred basis, the Liberal/National Coalition is expected to win 52% of the vote and the ALP 48%.

Overall, the market believes there is an 80% probability there will be a Liberal Prime Minister after the next election and an 18% probability there will be an ALP Prime Minister.

Miscellaneous

iPredict is owned by Victoria University of Wellington and operates under New Zealand law under the Futures Contracts (iPredict Limited) Declaration and Exemption Notice 2008. iPredict traders warrant and undertake that they are 18 years of age or older and will comply will all laws in the jurisdictions in which they are present.

ENDS

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