iPredict Launches Stocks on Budget 2011 Fiscal Outlook
New Zealand's online predictions market, iPredict Ltd, will launch overnight three bundles of stocks aimed at predicting
how aggressively the New Zealand Government will seek a return to surplus in this week's Budget.
The first bundle will ask iPredict traders about the size of the forecast deficit for 2011/12, the second about when the
New Zealand Government's accounts will return to surplus and the third how aggressively the Government will cut Working
for Families parental tax credits to higher-income New Zealanders.
iPredict's Chief Executive, Matt Burgess, said Prime Minister John Key had indicated, in his speech last week to a
Fujitsu - Business NZ Luncheon, that the Budget would include savings to improve New Zealand's fiscal outlook, including
in the areas of Working for Families, KiwiSaver and student loans.
"The three contract bundles are designed to give an indication prior to the Budget of the extent of those savings," he
said.
The first bundle consists of 11 binary contracts asking traders to select bands of the operating balance as a percentage
of GDP for 2011/12. Traders can choose from a surplus, a deficit of more than 9% of GDP, or nine bands between these two
extremes. In last year's Budget, a Total Crown Operating Deficit Before Gains and Losses of 2.5% of GDP was forecast for
2011/12.
The second bundle of seven binary contracts asks traders which financial year the Budget documentation will first
forecast or project an operating surplus - from "2011/12" through to "2017/18 or never". Last year's Budget projected a
return to surplus in 2015/16.
The third bundle of six binary contracts asks traders to predict the before-tax income limit, for a family with four
children, for the Working for Families parental tax credit for the 2012/13 financial year. The income limit this
financial year is $166,054 as reported at http://www.workingforfamilies.govt.nz/tax-credits
Draft stock definitions for all three bundles are now available for comment on the iPredict forum at https://www.ipredict.co.nz/app.php?do=forum
They will be launched overnight, New Zealand time, for trading from tomorrow.
ENDS