IPREDICT LTD
Economic & Political Newsletter: ACC Scandal Special
31 March 2012
FOR IMMEDIATE RELEASE
www.ipredict.co.nz
Key Points:
• Collins set to survive ACC scandal but defamation actions expected to fail
• “Beehive staffer” most likely culprit for Boag email leak
• Police expected to investigate while new stock launched on probability of Prime Minister announcing an inquiry
• Nick Smith looks safe from further sanction and has 1/3 chance of being re-appointed a minister by year’s end
• National appears unaffected by scandal with new stocks on next TVNZ poll launched overnight
• Labour still favoured to win next New Zealand election
NZ ACC Scandal
New Minister for the Accident Compensation Corporation (ACC), Judith Collins, appears set to survive the current ACC
scandal at least for the next two months, with iPredict’s 6000 registered traders giving her just a 34% probability of being sacked or resigning before 1 June 2012.
Ms Collins also appears safe from being found to have leaked the critical email by former National Party president
Michelle Boag, with just a 13% probability she will be found to have been the culprit for the leak. The most likely leaker, according to iPredict traders, is “a Beehive staffer” (55% probability) followed by “an ACC official (excluding Chairman John Judge or Deputy Chairman John McCliskie)” on 42% probability. There is only a 10% probability Ms Boag will be found to have been involved.
Despite this, Ms Collins’ defamation action against Radio New Zealand and Labour MPs Trevor Mallard and Andrew Little,
after they made comments she believes connected her to the leak, appears unlikely to succeed. There is just a 12%
probability the courts will award Ms Collins damages on the matter within the next five years. Meanwhile, there is just a 10% probability Ms Collins will extend her litigation to the left-leaning blog www.the.standard.org.nz.
As the scandal continues, iPredict traders suggest a 79% probability the New Zealand Police will formally announce an investigation into the scandal before 1 October, while a new stock has been launched asking whether or not Prime Minister John Key will order a public inquiry into the matter, as he comes under increasing pressure to do so.
Former ACC Minister Nick Smith, who resigned from Cabinet over his role in matters related to the early part of the
scandal, is not likely to face any further sanction. There is just a 31% probability that the Prime Minister, Auditor
General, Ms Collins, or another person of official governmental authority will announce a formal independent inquiry into his conduct as ACC Minister and a 34% probability he will be re-appointed as a minister before the end of the year.
So far, the scandal appears not to be affected the Government’s probability of being re-elected. Early, low-volume
trading on stocks forecasting the results of the next TVNZ poll, expected as soon as tomorrow, suggests National will have 48% support, Labour 30%, the Greens 12.5%, and NZ First 5.1%.
Forecasts of the actual election result are also largely unaffected. The probability the next election will be held in 2014 has remained broadly steady at 91% through the scandal, as has National’s forecast party vote of 42.1% and the probability there will be a National Prime Minister after the next election of 45%. Labour has a 55% probability of winning the next election.
The probability Mr Key will depart as Leader of the National Party in 2012 has fallen to 9%, as has the probability he will depart in 2013, also to 9%. However the probability he will depart in 2014 has moved up to 39%
Ms Collins’ prospects of replacing Mr Key have plunged. Having previously sat around the 40% mark, the probability she will be the next National Party leader is
now just 17%. Should there be a vacancy, the two leading contenders are now Steven Joyce and Hekia Parata with 19% probability each.
Perhaps because of the distraction of the ACC scandal, no new minister is expected to be appointed to Cabinet by 3 April. Simon Bridges is however expected to be appointed a Minister outside Cabinet, by 3 April. Whenever a reshuffle does occur, Gerry Brownlee is favoured to be the next Minister of Local Government. Chris Finlayson is favoured to be the next Minister for the Environment, and Craig Foss is favoured to be the next Minister for Climate Change Issues. David Carter is expected to leave the Primary Industries portfolio by the end of the year, most probably to become Speaker. Nathan Guy is favoured to replace him as minister responsible for New Zealand’s largest industries.
New Zealand Economic Forecasts
Contracts have been extended out to December 2013 for GDP growth, unemployment, Inflation, and the current account
deficit. Commentary on these stocks will be included as trading increases on the NZ Economics page.
Short-term New Zealand growth prospects are largely unchanged this week, with growth expected to be 0.5% for the March 2012 quarter (steady), 0.6% for the June 2012 quarter (steady), and 0.4% for the September 2012 quarter (down from 0.5% last week).
Forecast unemployment is unchanged from last week, with the market still predicting unemployment of 6.4% for the March 2012 quarter and 6.3% for the June 2012 quarter. Early trading suggests that unemployment is forecast at 6.3% for the September 2012 quarter and 6.2% for the December 2012 quarter.
Inflationary expectations have remained steady over the past week. Inflation is forecast to be 1.6% for the March 2012 quarter, 1.5% for the June 2012 quarter and 1.7% for the September 2012 quarter.
91 unleaded petrol is expected to cost $2.18 per litre at the end of April rising to $2.20 per litre at the end of May.
The Reserve Bank of New Zealand is expected to hold off increasing the Official Cash Rate (OCR) until December 2012,
when it will rise to 2.75%. Last week the OCR was expected to rise in October and again in January.
Fonterra payouts for milk solids before retentions have increased slightly this week. The 2011/12 Fonterra payout is now expected to be $6.82 per kilogram, up 4c over the week. The forecast payout for 2012/13 has increased 5c to $6.38, the forecast payout for 2013/14 has remained steady at $7.38, and forecast payout for 2014/15 has also remained steady at $7.42 New stock has been launched for the Fonterra payout 2015/16, iPredict will report on it once trading has increased.
Current account deficit expectations are 4.26% to March 2012, down 0.03 points on last week.
International Economic Forecasts
World growth expectations remain steady at 3.09% for the 2012 year.
There is a 27% probability that at least one Euro member will depart the single currency in 2012.
There continues to be a 40% probability the US Senate will formally approve a resolution of ratification of the Trans Pacific Partnership by July 2015.
There is a 52% probability that New Zealand and South Korea will sign a Free Trade Agreement before 1 December 2014.
International Politics
In London, Boris Johnson has a 76% chance of winning the 2012 Mayoral Election, with 48% of the first choice vote and 52% of the final vote, while Ken Livingstone has a 24% chance of winning the 2012 London Mayoral Election, with 41% of the first choice vote and 48% of the final vote.
In Australia, iPredict traders continue to forecast that the two candidates for Prime Minister at the next Federal Election will be
incumbent Labor Prime Minister Julia Gillard (56% probability) and Liberal Party challenger Tony Abbott (55% probability).
In the next Australian Federal Election, first preferences are forecast to be: Labor 33.9% (steady); Liberal 31.0% (steady); Greens 11.2% (steady); Queensland Liberal National 9.4% (steady); Australian National 6.8% (up from 5.2%) and Family First 4.5% (up from 4.2%). On a two-party preferred basis, the Coalition is forecast to win 51.7% of the vote and Labor 48.3%.
The Coalition has a 76% probability of forming the next Federal Government (up from 73% last week). New stock has been launched
predicting the next Australian Federal Election date, which must be held by November 2013.
In China, Wen Jiabao is not expected to remain Premier through to 1 January 2013. Yang Jiechi is expected to remain Minister of Foreign Affairs and Chen Deming to remain Commerce and Trade Minister. However, Zhou Xiaochuan is expected to be replaced as Governor of the People's Bank of China by year’s end, as is Xie Xuren as Minister of Finance.
Mitt Romney is expected to win the District of Columbia, Maryland, Wisconsin, Connecticut, Delaware, New York, Pennsylvania, Rhode Island, Indiana, North Carolina, West Virginia, Nebraska, Oregon, Arkansas, Kentucky, Texas, California, Montana, New Jersey, New Mexico, South Dakota and Utah Primaries. While Rick Santorum is only expected to win the Missouri Caucus.
Overall, Romney has a 95% chance of being the Republican Party nominee, however Barack Obama is expected to win the presidential election. The Democratic Party is expected to win 53% of the share of the Electoral College vote, and 52% of the popular vote. The Republican Party is expected to win 47% of the Electoral College vote and 48% of the popular vote.
In the UK, the Conservative/Liberal Democrat coalition is expected to survive 2012 (78% probability).
In France, there is a 66% probability Francois Hollande will win the presidential election over incumbent Nicolas Sarkozy.
In Syria, early trading suggests Bashar al-Assad will remain in power until at least 1 December 2012.
There is a 31% probability Israel will launch an airstrike against Iran in 2012, up from 27% last week and a 13%
probability North Korea will detonate an atomic device (steady from last week).
Science and Climate Change
There is a 40% probability average global temperatures will be hotter in 2012 than in 2011 and a 13% probability 2012 will be the hottest year on record.
Other NZ Issues
Traders believe that the New Zealand Police will experience cuts in their appropriations for the 2012/13 budget. No commission of inquiry is expected into the 2007 police raids on suspected terror activities in the Urewera district, and no retrial is expected for the so-called ‘Urewera Four’.
Pengxin Group’s bid for Crafar farms is predicted to become unconditional between 28 April and 2 June 2012.
The Defence Force isn’t expected to announce an outsourcing of their payroll administration before 2013.
The Auckland Council is no longer expected to add a new bin for glass collection, and the market doesn’t believe there will be an increase in the waste levy rate.
Miscellaneous
iPredict is owned by Victoria University of Wellington. Details on the company and its stocks can be found at www.ipredict.co.nz. The weekly snapshot is taken at a random time each week. This week’s was taken on the afternoon of Friday 30 March.
ENDS