Amid all of the political kerfuffle, opinion polls and growing sense of incompetence surrounding the Abbott government, the betting markets continue to have the Coalition as warm to hot favourites to win the next Federal election.
For those punters thinking Labor will cruise to victory at the next election, buoyed by disenchantment with thet Abbott government, as much at $2.65 is available from the bookies. In other words, punters can get a 165 per cent tax free return for a 28 months investment if in fact Labor romp home at the next election.
These appear to be generous odds in a two-horse race where the polls are generally 53 to 56 per cent to Labor and 44 to 47 per cent to the Coalition.
The best odds available for the Coalition are a tight $1.55, with money flowing to it in recent days after at one stage, $1.60 was offered.
The reason for these odds appears to be linked to the rarity of there being a one term government in Australia. Indeed, it has been over 80 years since there has been a one term government and while precedents are there to be broken, on this simple measure, the Coalition is likely to win the next election.
What is also important to remember is that in the intervening two years, the Coalition will likely return the budget to surplus and use this as the basis of its 2016 campaign.
One other issue is that by wagering now, a punters money is locked away for 28 months and even with low interest rates, the cost of carry for a wager now is around 8 cents per dollar.
The punters get most election right, but only much closer to polling day. A notable exception was in South Australia in March when, in the days before the poll, as much as $11.00 was offered on the return of the Labor Party. The Coalition was $1.01.
I suspect the Coalition are good value at $1.55 right now but I will be keeping my money in the bank a while longer, watching the odds and political atmospherics change, before deciding which way to go and dipping in.