PETER VAN ONSELEN: You may not know Andrew Leigh. But what he found about the ‘Nostradamus effect’ of betting markets will reduce him – and Albo – to trembling wrecks

The betting markets have flipped, they now have the Coalition as the favourites to form government after the next federal election, not the incumbent Labor Party.

Sportsbet has the Coalition at $1.80 with Labor at $2. The TAB has Labor out at $2.10 and the Coalition at $1.72.

Clearly the impact of cost of living pressures, a decreasing likelihood of an interest rate cut early next year and the criticisms surrounding Albo’s Qantas upgrades and purchase of a $4.3m waterfront coastal holiday house have spooked punters. 

They are putting more money on the Coalition than Labor thus driving down the Opposition’s odds. 

Perhaps the election of Donald Trump has also helped shift sentiment since his resounding win last Tuesday.

But before we go any further, a word of caution to anyone who sees this shift as a clear sign that Labor’s chances at the next election are waning. Gamble responsibly!

Betting markets, while often a good guide to which party is likely to form government, become more accurate the closer we get to polling day and as more money gets tipped into the pot.

Historically political betting markets tend to load up with bets closer to the day of the election, which still isn’t due for another six months.

A lot can change in six months, and the PM gets to choose the timing of the election.

He’ll call it when he thinks he can win, you can bet on that. In other words, he still has the whip hand to a significant extent. 

Further, no first term government has lost a re-election attempt federally in this country since way back in 1931, so history is on Labor’s side.

Plenty of first term governments have come close to losing, however. 

John Howard’s Coalition scraped home at the 1998 election with less than 50 percent of the two party vote. 

Julia Gillard’s Labor Party was reduced to minority government at the 2010 election. 

And Malcolm Turnbull’s team won the 2016 election with the slimmest majority possible. 

All these first term governments were re-elected, albeit only just.

Albo’s fate may well be to win ugly and only form minority government with Greens support. 

But winning one way or the other remains the more likely outcome in my opinion, despite what the betting markets and the opinion polls are currently saying.

Yesterday’s Newspoll mirrored the betting markets, with Labor’s two party vote trailing the Coalition’s 49-51 percent.

But one person who would have to be watching the shift in the betting markets with more than a little bit of interest is Andrew Leigh – a Labor Party minister who works for Albo. He’s the assistant minister to the Treasurer. 

In a past life Dr Leigh was a professor at ANU and he wrote an academic study for the Australian Journal of Political Science on the accuracy of betting markets. 

Economist Andrew Leigh – who works for Albo as assistant treasurer – wrote an academic study about the accuracy of betting markets for predicting election outcomes

Crunching the numbers on betting market accuracy verses other metrics for predicting election outcomes such as opinion polls, Dr Leigh found that betting markets are easily the most accurate way to predict election outcomes. 

Perhaps because of that he’s already put his CV out to universities planning a return after the next election?

But I’m sure the good doctor would say it is too early to read too much into the flipped betting predictions, as already mentioned.

Nonetheless, they must concern Team Albo. He needs to find some momentum. 

It seems that his higher education bribe, chopping 20 percent of people’s HECS debts hasn’t changed his fortunes – yet, at least. 

The betting markets got the US race right and the recent Queensland election too. 

Punters will no doubt be watching them closely between now and the federal poll, to see if it becomes a case of three times lucky?