The staggering swing in the polls in recent months and weeks now have Labor ahead of the Coalition by between 4 or 10 points. Despite this change in form, there has not been even a one cent move in election betting markets.
The Coalition are still hot $1.45 favourites to win the next election (presumably in 2016) while Labor are as much as $2.75. This suggests a couple of things about the polls and indeed, the betting markets themselves.
Importantly, the election is still around 28 months away and the Labor need to gain around 20 seats to win the next election. Time and the size of the Abbott majority make a Labor win unlikely no matter how poorly the government is travelling at the moment.
It is also important to note that the predictive power of public opinion polls this far out from election day is not good. Lots will happen between now and election day that will see voters swing back and forth and where this swing stops, no body can yet tell. What’s more, putting a bit of your hard earned cash on the election outcome this far out ties up your money for those 28 months, meaning the cost of carry until election day is not insignificant – even in the current low interest rate environment. at 4 per cent, the value of a bet placed now drops around 10 per cent until polling day.
The polls, like the Melbourne Cup previews, are fun, interesting and do contain some information about how politics is travelling, but as a predictor of who will win the next election, don’t bother.