Punters point to a Labor minority government in Victoria

The overwhelming view is the Andrews government will win the Victorian election comfortably, possibly extending its margin in the lower house, but an analysis based on betting markets in individual seats reveals a strong possibility that Labor will find itself in minority government come Saturday night.

A ReachTel/Fairfax poll published on Friday morning has the Andrews government ahead 54-46 two party preferred. If accurate, this would mean Labor could pick up as many as five Coalition held seats (Ripon, Morwell, South Barwon and Burwood). Herald Sun Galaxy has it at 53-47.

The betting markets, however, do not see it that way.

At present, Labor nominally holds 46 seats in the 88 seat Legislative Assembly.

If we look at the betting markets alone, Labor is tipped to lose the inner-city seats of Richmond and Brunswick to the Greens, forcing it into minority government.

There remains the prospect that Labor may grab a seat or two from the Coalition but on the betting markets, the Coalition is favoured to hold all its marginal seats with the possible exception of South Barwon where the betting has Labor and the Coalition neck-and-neck at $1.80.

I’ve been doing an analysis on state and federal elections for some time now based on average polling figures which I cast across the electoral pendulum to identify seats in play and then examine the betting on those seats in an attempt to predict the overall outcome.

I usually get to within three or four seats of the actual margin even when the results have been something of a surprise. I predicted Labor would win minority government in Queensland in 2015 (Palaszczuk/Labor ended up winning with a majority of two with 35 seats changing hands) and tipped the Coalition to have a majority of two in the 2016 federal election. Close enough.

The problem in the Victorian election is the polling has been threadbare and I am not entirely certain about the accuracy of some of it. This morning’s ReachTel/Fairfax poll has the Coalition’s primary vote at 36 per cent. That’s a decline of five per cent on the 2014 election result. The poll has Labor’s primary vote increasing by one per cent on the 2014 actual. How that translates into 54-46 Labor’s way (up from 52-48 in 2014) is difficult to understand. I presume the polling company has applied preference flows from the 2014 result, but this is vexed.

My view, based on the entirely unscientific basis of speculation, is that the primary vote of both the majors will decline with the minors and independents getting around 25 per cent of the primary vote. That would be a new record in the state. Polling companies face difficulties in establishing a two-party preferred figure based on historical preference flows when the ‘other’ vote is on the rise.

With increasing numbers of voters pre-polling these days, betting markets are likely to be more accurate and offer fewer surprises.

There are caveats of course. The individual seat markets in state elections are based on relatively small betting pools. The bookies won’t let on how much dough they are carrying. It may be just a few hundred dollars or in some seats nothing at all.

No good analysis should be devoid of a little guesswork. I would say overall that Greens voters, damn their oily hides, tend not to punt on elections, this being contrary to their desolate, fun-free view of the world. So, where markets reflect the Greens are going OK, they are probably doing better than that.

The good news for Labor from this analysis is that it is short odds-on to retain a brace of marginals in Melbourne’s southeast, the so-called law and order seats of Frankston, Carrum, Bentleigh and Mordialloc. It holds the first three of these by margins of less than one per cent. In Frankston and Carrum, the bookies have Labor at $1.33 to hold and in Bentleigh $1.20 to retain the seat it won from the Coalition in the 2014 election.

The Coalition may pinch the seat of Prahran back from the Greens but the betting in the inner-city seat south of the Yarra is as murky as the river itself with the bookies offering little better that even money the field.

The three-cornered contest has the Coalition at $2.30, Labor at $2.40 and the Greens at $2.75.

The market shows the Coalition’s attempt to win back Morwell from former National turned independent, Russell Northe is possible although Northe remains outright favourite ($2.25, Coalition $2.75, Labor $3.00).

Labor is learning the hard way the seats it coughed up to the Greens are not likely to come back anytime soon. It lost the seat of Melbourne to the Greens in the 2014 election. The Greens are at $1.36 to retain, Labor at $2.40. In Northcote, which Labor lost in a by-election to the Greens after the death of the sitting member, Fiona Richardson, the Greens are at $1.30 to retain with Labor $3.50.

No joy there for Premier Dan.

My best guess is the two major parties will lose in all seats where Greens or independents are sitting members. Interestingly, the Ipsos/Fairfax poll has the Greens vote coming down, so Labor may yet hold Richmond and Brunswick.

Labor has dragged out the ultimate heavy hitter, former Prime Minister Paul Keating to give its flagging campaign in Richmond some momentum. Planning Minister, Richard Wynne is in the gun. In a letter released to the media, Keating criticised Opposition leader, Matthew Guy, for failing to run a candidate in Richmond.

“Matthew Guy is attempting to defeat Planning Minister Richard Wynne by leaving the field wide open to the Greens. And what motivation would Mr Guy have for such a strategy; obviously to do the bidding of the property development industry, with whom he is so close,” Mr Keating wrote.

I love it when you talk dirty, Paul.

This is the first occasion in almost ten years where the betting markets have been at odds with the polling. It will be interesting to see what stands up on Saturday night.

Be it on polling or the hard earned of the punters, the prospect of a Coalition victory in Victoria is so minute it may only be visible through an electron microscope. But if the betting is the stronger guide, Dan Andrews’ celebrations might be tempered by the knowledge he will be governing only with a nod from the Greens.

This column as first published in The Australian 23 November 2018.