Oz Politics Blog

Yesterday was the eleventh full day in the Federal election campaign.

Labor issued media statements on broadband and helping volunteers with petrol costs.

The Coalition issued policy statements on rural health and transport in Perth

Statistics: The Possum looked at the relationship between the Reserve Bank cash rate and Labor’s primary and two-party preferred vote in the opinion polls since 1999. His (I assume Possum is a “he”) multiple regression models explained some 75% of Labor’s vote movement in the opinion polls over the period. The models predict that if interest rates rise by the 25 basis points anticipated by the markets, Labor can expect its primary vote to increase by about a percentage point in the opinion polls, and its two party preferred vote to do likewise.

The Possum’s other conclusion was that Kevin Rudd’s ascension to the Labor leadership was worth around eight percentage points in Labor’s primary vote in the opinion polls and three and a half percentage points in its two-party preferred vote (in comparison with Kim Beazley).

Betting markets: Yesterday, Sportingbet CEO Michael Sullivan said that almost all of the money taken since the Australian Bureau of Statistics CPI announcement had been for Labor. “We’ve taken almost $100,000 of bets in just 24 hours, since yesterday morning’s announcement of the inflation figures and 99% of that money has been for Labor,” he said. “That’s meant that Labor’s price has shortened again to $1.40 and the Coalition’s odds have drifted out to $2.95 from $2.60.”

Polls: Adelaide — 64-36 in Labor’s favour. The Poll Bludger has a good graphic of all the recent Advertiser polls.

GetUp commissioned a Galaxy Senate poll, which was reported in the SMH and the Brisbane Times — Labor: 33; Coalition: 38; Greens: 11.

Yesterday, Labor released a policy statement on workplace health and safety.

The Coalition released a policy statement on vocational skills colleges for the defence force.

And, importantly, the Australian Bureau of Statistics released the Consumer Price Index (CPI) for the September 2007 quarter.

According to Peter Martin,

The measure of inflation most watched by the [Reserve] Bank, the so-called “trimmed mean” calculated for it by the Bureau of Statistics, came in at 0.9 per cent for the September quarter, the second successive quarter it has done so, and sharply more than the 0.5 per cent and 0.6 per cent reported in earlier quarters.

The result suggests that Australia’s annualised rate of inflation is already at or beyond the top of the Reserve Bank’s 2 to 3 per cent target zone.

The other measure of underlying inflation calculated for the Bank, the so-called weighted median, came in even higher at 1.0 per cent – the worst quarterly result since 1991.

Martin also noted, that the “headline rates were artificially depressed by a change in the way the Statistician accounted for the 30 per cent childcare tax rebate. Previously paid though the tax system it was not regarded as reducing the price of childcare, but since July it has become a direct payment and been incorporated in the measured price. The change cut 33.4 per cent off the apparent price of childcare in the figures released yesterday, when in fact the price was broadly unchanged. Bureau staff told the Canberra Times that without that technical change Australia’s headline rate of quarterly inflation would have been 0.9 per cent rather than 0.7 – the same as Reserve Bank’s preferred measure.”

Consequently, according to the SMH, “markets have priced the chances of a November [interest rate] rise at 82 per cent.” The SMH also reported that “a 0.25 percentage point increase [in interest rates] … would boost the average home loan rate above 8.5 per cent for the first time since November 1996.”

On the inflation front, George Megalogenis has identified the fastest movers since the last election.

Since the last election, the CPI has averaged 3 per cent a year. Fruit and vegetable costs have jumped by more than four times that amount - 13.5 per cent a year. Petrol was double that, at 7.7 per cent; secondary education 7.5 per cent; water and sewerage 6.3 per cent.

Politics tests: I fixed a formatting problem on my politics test page. News has its own politics test.

The latest Consumer Price Index (CPI) figures are out so it is time to revisit the Sawford formula. The formula states that 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.

Election dates are indicated in the above graphs by vertical red lines. You may need to hit the refresh or reload button on your browser to see the latest graphs.

The latest Reuters Poll Trend just arrived in my inbox.

The poll trend included the following analysis from Reuters:

The Poll Trend shows the government began to slowly claw back support after the May budget, pegging Labor’s lead back to 8.9 percent by early August. But Howard’s comeback stalled in August, when the central bank increased interest rates.

The Reuters Poll Trend is not a poll; it is an analysis of the three main polls — Newspoll, published in The Australian newspaper, ACNielsen, published in the Sydney Morning Herald and Age newspapers, and the Morgan Poll, published on line. The Trend aims to summarise the polls by compiling them and removing their volatility. It starts by rolling the published data from the major polls into a fortnightly three-poll average, weighting them equally and the smoothing volatility by using a five-term Henderson moving average. The Henderson process dampens short-term up-and-down movement but aims to leave untouched the underlying drift in the data.

Yesterday’s big announcement was that the Coalition would spend $4 billion on more support for pensioners. The Coalition also announced policies on establishing a council on mental health and tackling the feral pest menace.

Labor announced measures to improve the quality of childcare.

The Secretaries of the Treasury and the Department of Finance and Administration released the Pre-Election Economic and Fiscal Outlook 2007 (PEFO).

Today, the September quarter CPI figures should be released.

Polls: Hindmarsh (60-40 Labor)

Postscript: Thank you for the avalanche of emails telling me that I had mislabeled the poll result as Hinkler and not Hindmarsh.