Oz Politics Blog

Today’s media about the business activities of Therese Rein (wife of Kevin Rudd) raises a host of questions about women’s rights and probity in politics.

Can the “life-partner” of an active politician be a successful business person in his or her own right?

Is there a conflict of interest?

Do we have different standards for the spouses of backbenchers and Cabinet ministers? What about Opposition Leaders?

What do you think?

There have been some questions on the Watty Sawford formula (also known as the Rod Sawford formula): if two or more of the unemployment, inflation and interest rates rise over a full, three-year electoral cycle, the government will lose. Conversely, if two or more fall the government will be returned.

According to Mumble (9 July 2006), this formula has picked every Federal election since 1961 except 1974 and 1980.

As it currently stands, following the 2004 election:

• The unemployment rate is down from 5.1 per cent to 4.5 per cent
• The inflation rate is arguably down from 2.6 per cent for the year ending December 2004, to 2.4 per cent for the year ending March 2007 — and significantly down in the last two quarters with a net CPI growth of zero
• Interest rates are up from 5.25 per cent to 6.25 per cent

In my view, the Sawford formula is a shorthand way of saying that governments tend to be returned to power if they manage the economy well. This understanding underpins a number of economic models for predicting election outcomes. Of course, the Sawford formula is not a hard and fast rule; it is just a guide. Other factors can and have seen it overturned, and in this election year other factors — probably WorkChoices and the drought (and maybe petrol prices) — are impacting on the polls.

It is too early to conclude that Howard has lost (remember 1993 and 2001) and it is too early apply the Sawford formula (there will be more rate data before the election). However, with two down and one up, the Sawford formula currently suggests a Coalition victory. This is a change on July 2006, when the SMH ran the above linked story on the Watty Sawford formula. At that time interest rates and inflation were up.

Update: I blogged on the Sawford formula in response to some questions. I was surprised when Dennis Shanahan decided to write on the same topic.

Update #2: Charles Richardson wrote and said, “why would anyone think 1974 was an election after ‘a full, three-year electoral cycle’ - it was less than 18 months.” He has a point.

Update #3: FCOTW had a go at me on my claim that inflation is down. I concede that depending on which measure you use, and which starting point you take (September or December 2004) you can argue inflation as either up or down. In my defence I should note that I said that arguably inflation was down. The arguable nature of the proposition is demonstrated in the next graph. The date of the 2004 election is indicated by the vertical red line.

It has been a tough week for the government. In broad terms, the betting market has moved from probabilities of almost 50-50 each way to something approaching 55-45 in Labor’s favour. The book makers are saying that if the same 2007 Federal election were repeated 20 times, John Howard would expect to win 9 elections and Kevin Rudd would expect to win 11. It is still a close contest. This is roughly where the betting market was in the six or so weeks before the Budget.

The other graphs are here. You may need to hit the refresh or reload button on your browser to see the latest graphs.

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According to the Australian, last weekend Newspoll examined the Voldemort of workplace reform. In essence, the new fairness test has done little to improve the image of WorkChoices the Dark Lord.

Overwhelmingly, people said the Government’s policy change made “no difference” to them, and in almost every group more people said the change made them less likely to vote Coalition rather than more likely.

While Newspoll did not undertake its full suite of beauty contest polling, it did ask questions on voting intention. The predicted national two-party preferred vote shares were 57 per cent for Labor and 43 per cent for the Coalition. The Coalition’s primary vote was 39 per cent (up three points, and Labor’s primary vote was 49 per cent (down one point).

It appears That-Which-Must-Not-Be-Named has polarised voters. The losers in this clash are the Greens (on a low of three per cent, down one point), and others (nine per cent, down one point). The independents and minor parties (including the Greens) have taken a fair pounding on the polls in recent months.

While my highly speculative trend graphs suggest that the government is still in with a chance come December 2007, it looks like the TPP trend to the government has slowed (perhaps flat-lined) since the beginning of April.

The shrinking of the non-major-party-voting-block means that the Coalition will need to do much better than 42 per cent primary vote (my usual rule-of-thumb) in order to win government.

The usual opinion poll graphs are here. You may need to hit the refresh or reload button on your browser to see the latest graphs.