iPredict: Goff V Williamson Battle Expected for Auckland Mayoralty

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www.ipredict.co.nz New Zealand Weekly Economic and Political Update

iPredict: Goff V Williamson Battle Expected for Auckland Mayoralty

There will be by-elections in both the Mt Roskill and Pakuranga electorates before the next general election, with their MPs, Labour’s Phil Goff and National’s Maurice Williamson, expected to face off for the Auckland mayoralty, according to the combined wisdom of the 8000+ registered traders on New Zealand’s predictions market, iPredict.  Stocks on who will be the next mayor of Auckland will be launched over the next week.  In national politics, both National’s John Key and Labour’s Andrew Little have become more secure as leaders of their parties over the next week, but National has made a small gain in terms of who will win the next election.  There has been a further rise in expectations for Auckland house prices but the Official Cash Rate is expected to remain at 3.5% next week.  Despite the so-called “sheepgate” scandal, foreign minister Murray McCully appears safe in his job through to the end of the year. 

New Zealand Politics:

·       John Key is expected to remain National leader until the end of 2016 (89% probability, up from 82% last week) but still has just a 48% probability of being National leader on Nomination Day (steady compared with last week).  Mr Key has just a 19% probability of remaining National leader until the end of 2017 (up from 15% last week)

·       Paula Bennett remains the favourite to become National Party leader if a vacancy arises (38%, up from 37% last week), followed by Judith Collins on 20% (down from 21%)

·       Andrew Little is expected to remain Labour leader until at least the end of 2016 (75% probability, up from 66% last week) and has a 79% probability of being Labour leader on Nomination Day (up from 60% last week).  Mr Little has a 56% probability of remaining Labour leader until the end of 2017 (up from 49% last week)

·       Stocks on who would replace Mr Little has leader of the Labour Party should a vacancy arise will be launched this week

·       Judith Collins has a 48% probability of being appointed to Cabinet this year (down from 50% last week) and a 62% probability of being appointed before the next election (down from 65%)

·       Tim Groser is expected to be New Zealand’s next Ambassador to the United States (93% probability, steady compared with last week) and Maureen Pugh is expected to become eligible to be a list MP before the next election (95% probability, steady)

·       Murray McCully is expected to remain Minister of Foreign Affairs through to the end of 2015 (only 48% probability of a departure)

·       Phil Goff is expected to stand for the Auckland mayoralty (93% probability, up from 86% last week) as is Maurice Williamson (71% probability, steady).  There is an 86% probability of a by-election in Mt Roskill before the next general election and a 53% probability of a by-election in Pakuranga (up from 25% last week)

·       Stocks on who will be elected the next Mayor of Auckland will be launched this week

·       Next general election expected in 2017 (95% probability, up from 94% last week) with a turnout of 75% (steady)

·       Forecast party vote shares at next election:

o   National                             44.4% (up from 44.0% last week)

o   Labour                               34.5% (up from 33.8%)

o   Greens                               11.1% (up from 10.8%)

o   NZ First                                7.9% (steady)

o   Others                                  2.2% (down from 3.5%)

·       NZ First has a 76% probability of holding the balance of power after the next election (down from 83% last week).  If NZ First does hold the balance of power, there is a 50% probability it will back Labour on confidence and supply (down from 51% last week), a 50% probability it will back National on confidence and supply (up from 45% last week), and a 0% probability it would sit on the crossbenches (down from 2%)

·       National prime minister expected after 2017 General Election (62% probability, up from 61% last week)

·       David Carter is expected to be New Zealand’s next High Commissioner to the United Kingdom (83% probability, steady compared last week) and Gerry Brownlee has a 71% probability of being the next New Zealand Speaker (down from 85% last week), ahead of Anne Tolley on 27% (new stock) 

New Zealand Business & Economics:

·       Average Auckland house price expected to rise from $809,200 in April to:

o   $818,000 in May (up from $815,356 last week)

o   $831,273 in June (up from $822,540)

o   $834,990 in July (up from $830,430)

o   $840,440 in August (new stocks)

·       The average Auckland house price is expected to reach $1,000,000 in 2018 (62% probability, steady compared with last week)

·       Fonterra’s final payout (before retentions) expected to be:

o   $4.65 in 2014/15 (down from $4.72 last week)

o   $5.41 in 2015/16 (down from $5.47)

o   $6.05 in 2016/17 (up from $6.04)

o   $6.15 in 2017/18 (new stocks)

·       Quarterly GDP growth expected to be:

o   0.84% in the March quarter (up from 0.81% last week)

o   0.66% in the June quarter (down from 0.67%)

o   0.90% in the September quarter (steady)

o   0.98% in the December quarter (steady)

·       Annual growth expected to be 3.41% in the 2015 calendar year (up from 3.39% last week)

·       Unemployment expected to be:

o   5.51% in the June quarter (up from 5.46% last week)

o   5.30% in the September quarter (steady)

o   5.37% in the December quarter (steady)

o   5.45% in the March quarter (up from 5.44%)

·       New Zealand pay gaps in 2014/15 expected to be:

o   Gender                                9.95% (steady compared with last week)

o   Maori                                   12.28% (steady)

o   Pacific                                 23.12% (steady)

o   Asian                                   20.43% (steady)

·       Current account deficit expected to be:

o   3.51% of GDP in the March quarter (down from 3.61% last week)

o   3.57% in the June quarter (steady)

o   3.39% in the September quarter (steady)

o   3.49% in the December quarter (steady)

·       Annual inflation expected to be:

o   0.45% to end of June 2015 quarter (up from 0.39% last week)

o   0.50% to end of September 2015 quarter (down from 0.55%)

o   0.82% to end of December 2015 quarter (up from 0.80%)

o   1.56% to end of March 2016 quarter (steady)

o   1.47% to end of June 2016 quarter (steady)

o   1.50% to end of September 2016 quarter (new stocks)

o   1.52% to end of December 2016 quarter (new stocks)

·       Official Cash Rate priced to be:

o   3.387% on 11 June (up from 3.370% last week)

o   3.270% on 23 July (up from 3.225%)

o   3.194% on 10 September (up from 3.147%)

o   3.157% on 29 October (up from 3.101%)

o   3.111% on 10 December (up from 3.056%)

o   3.102% on 28 January 2016 (up from 3.046%)

o   3.081% on 10 March 2016 (up from 3.025%)

o   3.071% on 28 April 2016 (up from 3.015%)

o   3.058% on 9 June 2016 (up from 3.003%)

·       This implies the OCR is more likely than not to be cut on 23 July 2015 to 3.25% (compared with 11 June last week) and to be cut again on 10 December 2015 (compared with 29 October 2015 last week) and then to be held at 3.00% until after 9 June 2016

·       5% probability of a fiscal surplus in 2014/15 (steady compared with last week)

·       Fiscal balance expected to be:

o   -0.32% of GDP in 2014/15 (down from -0.31% last week)

o   0.20% of GDP in 2015/16 (down from 0.31%)

o   1.26% of GDP in 2016/17 (down from 1.41%)

o   1.96% of GDP in 2017/18 (steady)

·       New Zealand dollar not expected to reach parity with Australian dollar by the end of 2015 (only 13% probability it will achieve parity, up from 12% last week)

·       Stocks on tourism arrivals are now available for trading 

Foreign Affairs/Constitution:

·       Andy Burnham is favourite to be the next leader of the UK Labour Party (52% probability, down from 56% last week), ahead of Liz Kendall (32%, up from 29%) and Yvette Cooper (15%, up from 6%)

·       Boris Johnson has a 35% probability of being prime minister before 2020 (down from 38% last week)

·       UK expected to vote to stay in EU by end of 2018 (75% probability, steady compared with last week)

·       Socialist Workers’ Party expected to defeat People’s Party in next Spanish election (67% probability, steady compared with last week)

·       All Eurozone countries, including Greece, expected to remain in Euro in 2015 (21% probability of an announcement of a departure this year, down from 23% last week).  There is only a 38% probability of a departure by the end of 2017 (steady compared with last week)

·       Tony Abbott is expected to be leader of the Australian Liberal Party on nomination day (63% probability, down from 65% last week) and Bill Shorten is expected to be Labor leader (90% probability, up from 89%)

·       Liberals ahead of Labor for next Australian Federal election in 2016 (63% probability of Liberal win, up from 57% last week)

·       Hillary Clinton is favoured to be the Democratic Party’s nominee for US president in 2016 and to be elected to that office (49% probability, steady compared with last week).  Jeb Bush has a 33% probability of being the Republican nominee (down from 35% last week) followed by Marco Rubio (23%, steady) and Scott Walker (20%, steady)

·       There is only a 9% probability New Zealand will sign the Trans-Pacific Partnership this year (down from 13% last week), and the Trans-Pacific Partnership is not expected to be ratified by the US Congress before 1 July 2017 (only 43% probability it will be, steady compared with last week)

·       Helen Clark’s chances of being the next UN Secretary General are 25% (up from 23% last week)

·       There is a 10% probability New Zealand will become a republic by 2020 (steady compared with last week)

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 12.00 pm today. 

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Selwyn Manning, BCS (Hons.) MCS (Hons.) is an investigative political journalist with 23 years media experience. He specializes in reportage and analysis of socioeconomics, politics, foreign affairs, and security/intelligence issues. Selwyn has extensive experience as a commentator and has provided live political analysis to a wide range of television and radio organizations broadcasting in New Zealand, Australia and globally including the BBC (Five Live, London) and BBC (World Service). He is currently a correspondent to Australia's FiveAA radio, and is a regular live-on-air panelist on Radio New Zealand's The Panel with broadcaster Jim Mora.

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