The Federal Election: Your Expert Betting Preview

The Issues

The Labor Party is going to the election with a bold policy agenda, planning to reform the tax laws on negative gearing, franking credits on shares and capital gains tax. It will use the bulk of the revenue it raises from these changes to fund an ambitious program of reforms (extra spending) on health, education and aged care.

These are likely to gain popular support. Its team has also been remarkably stable since the 2013 election, lead by Bill Shorten, a point it is trying to highlight at the early stages of the campaigning.

The Coalition has been in power for almost 6 years, but has been dogged by internal disunity, which includes the dismissal of Malcolm Turnbull 8 months ago, the time Scott Morrison assumed the role as Prime Minister. Its strategy is to promise income tax cuts over the next 7 years whilst aiming to return the budget to surplus next financial year.

It is also trying to focus on a theme of its management of a “strong economy”, a point which may yet backfire given house prices are free-falling, wages growth is weak and given the so-called per capita GDP recession which became evident in the second half of 2018.

The Odds

Labor are currently $1.25 with the Coalition $4.60. The odds have been relatively stable for several months, generally close to the current pricing.

When published opinion polls have shown moves one direction or the other, the market has moved. Confidence about a Labor win, based on the polls, is being tempered by the Coalition having some initial impact with its income tax strategy.

At the Value

While the odds might appear short about a Labor win, the momentum in the early days of the campaign has been, and continues to be, strongly in its favour.

The 1.0% swing needed to win the election is a small change, well below the near universal lead that has been registered month after month in the opinion polls. Indeed, the average of the major polls implies a swing of around 2.5%.

Labor are still to roll out, in full, the pre-election policy “sweeteners” of spending on health and education, factors that should cement its lead and steer it towards a comfortable victory on 18 May.

The Liberal Party has fired all of its guns, with the income tax cuts, which will risk leaving the electorate non-plused with its relatively narrow agenda. Labor look value at current odds around $1.19 and it would take a serious error from it or its leader, Bill Shorten, not to win from here.

Barring a major shock event in coming weeks, Labor are value at odds above $1.10 and could even shorten further as the election draws near and voters shy away from the Coalition and warm to the notion of a Labor win.

Betting Strategy

Generally speaking, there’s nothing too appetizing about the short odds you’ll find the Labor party trading at. However, given all of the outlined vairables, we still see the $1.25 on offer as value.

Bill Shorten’s party still have a host of sweeteners to bring to the table, and even without them, look more than likely to bring about the 1.0% needed swing to win the upcoming election.

It might not be exciting, but we’re chips in on the $1.25 on Labor saluting on the 18th of May and are suggesting a strong back stake.

 BACK – Labor at $1.25 or greater.