From Crikey 25 October 2007

13. Brent: a paradox in the betting markets

Peter Brent from Mumble writes:

Even casual followers of the election betting market know that the punters’ behaviour in 2007 contains a paradox. While they comfortably favour the ALP to win the election, individual seat betting is line-ball. In fact, Labor is generally a little short of a House of Representatives on the seat-by-seat measure.

Simon Jackman’s most recent average has Labor favoured to take just 14 seats off the Coalition, which would give them 74 seats out of 150.

Recently in Crikey, Possum Comitatus suggested the Liberal Party might be strategically placing bets to keep party morale high. I have another theory: that the punters are bound up in the past.

The 14 seats Labor is favoured to take are: Bass, Blair, Bonner, Braddon, Cowan , Dobell , Eden-Monaro , Hasluck, Kingston, Lindsay , Macquarie, Makin, Moreton, Solomon, Swan and Wakefield.

Notice anything about those seats? Each was either held by Labor at some point during the Hawke-Keating years (1983-1996), or was created since then. (On-paper exception: Wakefield, for all intents and purposes a new seat with an old seat’s name.) I reckon the punters are having a psychological block. They are reluctant to envisage Labor taking seats that the Liberals have held for living memory. But they shouldn’t be.

Every change of government since at least WWII has seen the winner take seats it has not held before (or at least for a long time). It happens because electorates change: society, demographics, party allegiances and what the parties objectively stand for, are forever evolving.

From 1983 to 1996 Australia certainly changed, but electorally it remained largely under the surface because Liberal Party support was low everywhere. Only when John Howard stormed home in 1996 was all revealed. And today, some former Labor seats, like Hughes in Sydney and Dunkley in Melbourne, look set to remain Liberal for our lifetimes.

But by the same token, over the last 11 years other electorates, long-held Liberal ones, have been edging to Labor, and if the ALP wins big-time in 2007 - which looks very likely - there will again be some "ohmygod" results.

But the punters are psychologically hamstrung. They can acknowledge the former trend, but not the latter, which leaves only a few seats to choose from. Dobell is in their list but not Wentworth or Bennelong, because Dobell was recently Labor-held. (I actually reckon Dobell is the least likely of the three to fall.)

To the punters I say: forget the past. Then you’ll get the trees as well as the forest.