Possums Pollytics

Politics, elections and piffle plinking

Does Economic Management Influence The Primary Vote?

Posted by Possum Comitatus on October 17, 2007

A new day, a new Newspoll and a new take on the old hyperbole.

Todays Exhibit A comes from good old Dennis over at the The Oz:

The Coalition has stretched its commanding lead over Labor on the key vote-changing issues of the economy and national security.”The problem with these types of claims is that they can actually be statistically tested.

Either fortunately or unfortunately for Dennis (I have a suspicion which), we can’t test the national security issue for there aren’t enough observations to get a decent statistical grip. But we can test for how economic management changes the vote.

Newspoll runs two polling series on this economic management question, the first is “which party do you think would be best to handle the economy?”, but there are only 11 observations for that series, which also happens to be the question asked today.

The other polling series asks “Which leader do you think is more capable of handling Australia’s economy?” The difference between the results in these two series is nothing for the ALP, with both series returning the same results for similar dates, within the margin of error of each poll.

For the Coalition, the former question produces slightly lower results than the latter question. However, the first series also has a far larger amount of undecideds. So the second series, the “which leader is best able to handle…” series should have more sensitive voters in it, and that is reflected in the larger variation in the second series than the first. This is actually really good news. Variation increases testability.

If we head over here to Newspoll, and press “Display results” on the question of “Which leader do you think is more capable of handling Australia’s economy”, a lovely little table pops up containing 47 usable observations of data that can be tested against the relevant monthly Newspoll aggregate of primary votes for those dates.

First we’ll run a simple regression using the primary vote of the ALP as the dependent variable, and the “Which leader is more capable of handling the economy” results for the ALP as the independent variable .What we’ll essentially be measuring is how much does the primary vote of the ALP change for every one point increase in the number of people that believe that the ALP leader is better at managing the economy. What we expect to see is a positive relationship that is also statistically significant.

So running the regression we get:


What this tells us is that yes indeed, the ALP leader having a higher result in the “more capable” question does in fact walk hand in hand with a higher Labor primary vote. With a coefficient of 0.196, we can say that this result suggests that a 5 point increase in the “more capable” question leads to a 1 point increase in the primary vote. We can also say that this is highly statistically significant at less than the 1% level (with a p-value = 0.0014) and that the “More capable” results explain roughly 20% of the variation in the ALP primary vote figures.

Dennis, mate…..it’s alright you can breathe easy.

For the moment 😉

If we do exactly the same thing with the Coalition results we get:


The first thing you might notice is that the coefficient on the “More Capable” variable is the wrong sign. This suggests that an increase in the “more capable” results for the Coalition actually leads to a decrease in the primary vote, the exact opposite of what was expected. However, the results are completely and utterly statistically insignificant (with the p-value= 0.86). Similarly, results of the “more capable” question don’t even explain 1%, or even 1/10th of a percent of the variation in the Coalition primary vote.

So what does all this mean?

Well, it means that the ALP vote can rise or fall with big movements in the “more capable” answers. But since the ALP results didn’t move from last time in todays Newspoll question (stuck at 29), and since the answers for the ALP are historically the same in both polling series, we can say that todays poll is completely irrelevant as far as the ALP is concerned.

As for the Coalition, their results increased today from the last poll result (increasing from 51 to 53), a movement within the margin of error and hence not worth talking about to begin with. But if one felt compelled to talk about the results, the statistical evidence tells us that the Newspoll measures of the economy ARE NOT key vote changing issues for the Coalition, the answers to these questions DO NOT have any relationship with the primary vote of the Coalition, and that, if one were to stretch the absolute limits of credibility to infer something from the data, the best that could be said is “Better economic management more likely hurts the Coalitions primary vote than helps it”.

More stable minds would simply say “there is no relationship – period”, which is about the same that can be said of The Oz’s polling interpretation and reality at times.

I’ve been a bit slack on the comments over the last 2 days – sorry about that folks, been flat out.

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39 Responses to “Does Economic Management Influence The Primary Vote?”

  1. Laughing so hard at this expert nailing of that pundit from The Oz that it’s hard to type. Thought his take was ‘off’ but with only Applied Research Methods to fall back on I wasn’t up to pulling dear Dennis apart so well.

  2. David Hooke said


    Beautiful. Perhaps you need to change the source data to be complex vectors with the angle called the “shamaham rotation”, then we might understand the GG’s conclusions. Units would be “radians of spin”.

  3. country kid said

    After taking a peak at the “lovely little table”, it looks like JWH’s ratings in 07 (three of four in the 40s) pale a bit compared to the previous 4 years (from 11/02 to 11/06) – where he often rated in the 60s.

    Does this mean he isn’t quite the economic meastro we are led to believe?

  4. codger said

    Nightie minus crotch momenta
    #11 Possum…not too flat out I hope; rollaround a bit. I like my possums fluffy.

  5. canberra boy said

    Possum, what you don’t seem to understand is that Dennis Shanahan, along with the editorial team at the Oz, is one of history’s actors. While we waste time messing around in the blogosphere trying to analyse reality, Dennis and the team are out there creating new realities… well at least they’re trying to create new realities…

  6. Possum Comitatus said

    David – “radians of spin”! Classic! :mrgreen:

    Country Kid, that’s very true. The slow decline in that measurement is pretty much consistent with the slow decline of Howard all sorts of things like satisfaction ratings, not to mention vote.

    Codger, I’m flat out… I’m not roadkill!

  7. lurker said

    So, since the Coalition “own” the economy, a change in the percentage of best economic manager for them makes no difference. I guess that makes sense.

    But the ALP are traditionally seen as weaker economic managers, so an increase in that marker translates to an increase in primary vote. I guess this says that by concentrating on the economy, the Coalition won’t increase it’s primary vote, but by throwing doubt on Labor’s economic credentials, it can prevent the ALP’s primary vote increasing.

    So if not from the Coalition, where would the increase in the ALP’s PV come from? Others? How does it translate to 2PP?

  8. […] usual tricks today, this time spinning the Newspoll analysis of how the parties rate on key issues. Possum Comitatus has shown it for the load of crap that it is with a couple of quick regressions. […]

  9. mate said

    While I’ve got you here poss, everytime I look at your latest crickey bit. the dame cartoon blocks heaps of it…is this my settings?. some kind of evil plan by the GOV cos I’m in Ed-Mon or …?

  10. mate said

    “dame”…wtf…”dame”…how the hell did I type that? ‘e’ isn’t even close to ‘n’… but yet I typed it. I never met a ‘dame’…never used the word before I’m sure, did see a movie once but, still I cant see …….. ‘mutters to self walking away’

  11. Possum Comitatus said

    Mate, I have absolutely no idea about the inner mystical workings of Crikeys website.I’m not sure they do! 😉

    I use Firefox and Opera as a browser, and it works alright in both of those.Sorry mate, I’m not really much help here.


    The CT stuff had the Coalition as better positioned on “the economy”, but it was a low confidence issue with little significant influence on the vote which was really interesting.

    The ALP vote seems to be coming, from a CT perspective, from Workchoices and Rudd, and coming both from the Libs and the minor party vote.

    That’s a good analysis on why the Coalition is attacking the ALP on the economy though.They’re desperately trying to enhance it as an issue to the punters, trying to get votes back from the ALP via denigrating the ALPs ability to handle the economy.

    I think their big problem with this is that lately, Workchoices, housing affordability and discretionary spending budgets have become the big economic issues, but they aren’t seen by the punters as “The Economy”.

  12. Possum Comitatus said

    LOL mate.

    Dementia kickin’ in early eh? 😉

  13. Rod said

    It seemed to me that by far the most important thing about the results of the “Issues” poll was the comparative importance attached to different issues by the respondents.

    Shanahan , of course, talks about the “the key vote-changing issues of the economy and national security”, but just how “key” are they really?

    According to the NewsPoll itself these things are WAY down the agenda this time round. Health and Medicare, Water Planning, Education and the Environment all come out on top of “The Economy” as things that people are focused on. Throw in “Welfare and Social Issues” and “leadership” as well, when it comes to “National Security”. If the poll had asked about things like “Social Equity” and “Cultural tolerance” I suspect they would have come out well on top of “The Economy” too.

    Simply put, Australia has moved on. We are no longer living in Howard’s Tardis of Fear. People have realised what a con this stuff was and are focusing instead on things that have been neglected for far too long. We are far more worried about our kids getting a decent education and the sort of world our kids will live in, and perhaps being able to find a bed in a hospital when we are on the way out, than we are about being overwhelmed by a couple of thousand refugees , financially ruined by nurses who reckon they ought to get paid as much as a clerk in a real estate agents office, blown up by non-existent WMD’s and the like.

    Simply put “National Security” and “The Economy” are simply not the issues for most Australians any more. Scare campaigns simply don’t work when you cry “wolf” for too long, with next to nothing else to hang your hat on. When it comes to “worries” greenhouse climate change and downgrading of our jobs are much scarier propositions than a sinking fishing boat load of Iraqis or Burmese arriving in Cape York. When it comes to the positives, we are more interested in our kids getting a decent education than we are in Richard Pratt et al making a few more squillion at our own expense as a result of Howard/Costello “reforms”!



  14. PJay said

    Possum. Do you think nuclear power is a sleeper? JWH made comment yesterday that he will legislate for nuclear if returned. I vehemently oppose nuclear. Scary stuff. Can’t believe it’s not a first order issue.

    JWH MUST be FORCED to produce a map of Oz showing where he intends these 23 reactors to fusion. If he can’t produce one he is a vandal – legislating for nuclear power without first testing if we have a suitable site.

  15. S said

    Nuclear has to be the …. well.. nuclear option.

    I mean, you could fight a whole election on it… maybe Labor is holding back for the last week? How about releasing that and a tax policy in the same week?

    Whilst the coalition is trying to attack the Tax policy, Labor is going them on the Nuclear option?

    Bah, I should stick to my day job.

  16. John V K said

    The big cards for Labor are Interest Rates we saw a spike when the reserve moved and a mini advertising campaign.

    Nuclear Power is heart beat, I cant see any support for it and yet if you take the greenhouse carbon debate to it’s logical conclusion it would fit with environment but it does not, this is poison for Howard.

    Howard himself, he is poison this time around and Costello is not much better.

    Labor own everything else that matters.

    National security only plays when there is a threat clear and present and Rudd has narrowed this completely.

    This talk to day on tax by op ed in the Oz about demanding Rudd show his cards was the most partisan thing I’ve seen them do for a while. Rudd has not had the benefit of treasury that incumbent enjoys.
    And tax fades, because they will not get the tax refund in the mail during the election, like all of the other tax announcements.

  17. John V K said

    Oh and one last thing. Howard needed APEC so bad for the turn. Like your post on momentuum, if he was going to get the mathematical turning point that was it. They had so much of their strategy relying on it, the great man and the shoulder rubbing.

    This is a presidential type election. Howard asked a question, the question was yes. That’s where the buck stops.

    As long as Rudd keeps his head. Dont let them try to bushwack him and how they have tried. He should get in.

  18. Mr Squiggle said


    My first post on your site

    I loved this analysis, thats the sort of detail I’m looking for

    My guess on intepretation is that the “better on economy” figures reach a point where the LNP overplay their strength and it leads to a small drop in their primary.

    THis is the sort of number cruching that gets me exited

    Im off for a cold shower before Miss Jane notices my nose is a bit longer than normal

  19. Just Me said

    “We are no longer living in Howard’s Tardis of Fear.”

    Beautiful. Line of the day.

  20. Let It End said

    Thanks for that Possum, I couldn’t make any sense of what Shanahan was using to arrive at his conclusions, total nonsense.

    One question you may be able to help with. Considering the polls have merely bounced around 55/45 the whole year has there ever been a situation where such a prolonged and consistent trend has been broken/reversed during an election campaign?

  21. “radians of spin” – wish I’d thought of that one. I expect I will at some future date.

    Surely this effort from Dennis is at a full 3.14+ radians of spin – or has he already gone around the dial a couple of times?

  22. PS – loved the analysis too.

  23. Samuel K said

    While I will never in my life agree with Dennis Shanahan, I have to ask whether we need to look a little beyond the analysis of opinion polls for this question. While ratings on economic management may not be correlated with the primary vote in opinion polls, is it not possible that economic management remains an important factor in driving electorate risk aversity? In other words, might economic management not be important for the undecideds who get nervous about changes of government and switch their vote at the last minute? The way the last minute voters break could be critical in this election if the race tightens as I suspect it will.

  24. Bushfire Bill said

    Nuclear Energy…

    Who wants a reactor near their house?


    How many times do I have to tell youse all. It’s not about the reactors. They will never be built. They don’t have to be.

    While we spout NIMBYism, the legislation quietly goes ahead if Howard is elected.

    The legislation will set up the necessary framework for:

    1. Reactors
    2. Uranium Enrichment
    3. Waste Disposal.
    4. Transport of nuclear materials.

    First will come enrichment. Then waste disposal and transport. After all, we can’t have reactors without those, can we?

    Then the reactor debate begins in earnest. Doesn’t matter how long it takes to resolve, because in the meantime the waste and enrichment people (probably both the same people, actually) will need to start turning a dollar.

    We’ll start exporting enriched uranium on a leasing basis. We will own it. That’s for security. When it’s exhausted we’ll take it back to dispose of it. After all it’s OUR uranium, right? It’s ony fair we dispose of OUR own uranium, right?

    Nuclear reactors? We’ll that’s too hard. Let’s not have any. In the meantime the Howard mates are minting money smelting the fuel and the disposing of the garbage afterwards.

    The reactors are the Trojan Horse, designed to get us squabbling among ourselves while the well-connected make fortunes for themselves in “vital” ancilliary industries.

  25. I’m with Canberra Boy. It’s wonderful and important that Possum takes Dennis apart with such surgical precision but we aren’t telling Dennis anything he doesn’t already know in his secret, twisted soul. His job is to find anything he can push in the direction he and his Dear Leader want us to go. The Oz are so deeply in love with the idea of themselves as opinion makers that they can’t cope when reality ignores them. It may not be journalism but it sure is entertaining (as long as you haven’t paid for it). Must order more popcorn.

  26. El Nino said

    Possum, to take a slight tangent to your analysis, I have had a quick look at the Reserve Bank cash rates and election outcomes since 1993. I don’t recall you having looking at this in detail since I have become an acolyte. Being (I suspect) ever so slightly less tragic than your good self I have only given it a cursory glance. This is what I have observed:

    Mar93 – 5.75% – dropped 10.25% since the previous election, including 1.75% drop in the year preceding the election

    Mar96 – 7.50% – rises 2.75%, all in the year and a half after the 93 election

    Oct98 – 5.00% – dropped 2.5% since previous election

    Nov01 – 4.50% – dropped 0.5% since last election, but further falls were imminent due to 9/11

    Oct04 – 5.25% – up 0.75% but had been on a Terror-driven roller coaster during the term. Government were polling badly before the Latham implosion.

    Nov07 – 6.50% – rises 1.25% since last election, biggest intra term rise since 93-96 and lots of talk of further rises after (or even during) the election campaign. Also it is the second highest cash rate after 96.

    Given the rise in house prices and household debt in the last ten years, I think you can just about call the election on this issue alone. Forget Workchoices – this is elephant in the room.

  27. stevet said

    I notice the Government Gazette was at it again this morning with the hyperbolic headline: “Labor at war over IR laws.” Really? Every other newspaper reported Rudd’s pledge for new nurses. You can never take what they say seriously and Shanahan is the major culprit.

  28. […] How do views on economic management ability affect voting?. […]

  29. canberra boy said

    El Nino, the Possum did soem work on interest rates, unemployment and poll results back in May – concluding that rises in interest rates and in unemployment seem to help the Coalition in the polls. The money quote: “When times are tough, the people run to the Coalition and economic sunshine kills them.” My own observation on this is that, while interest rates have risen recently, they are still at relatively low levels by the standard of recent history. Voters think they can afford to change to the Opposition.

    Later in May Possum latched on to the percentage of household disposable income that goes towards interest payments as a better explanation of what has been causing the Government poll grief.

    I have to say that I think a November 6 interest rate rise from the RBA is not going to happen precisely because it would be a final nail in the Coalition coffin. There are plenty of grounds for the Board to argue that they need to wait ’til December – and they will.

  30. bungs said

    El Nino, further to canberra boy’s comments, the interest rate hypothesis is of course also one part of the Sawford theory, whereby, from memory two ouf of three factors have to rise for a change of government: the three factors are interest rates, unemployment, and inflation (not 100% sure that this was the third one). I believe for this election, since the last election, interest rates and inflation have gone up. for the last election only interest rates had gone up, with inflation stagnant (from memory). Have not got the time to look at more detail…

  31. Rate Analyst said

    #30 you are correct. Inflation wasn’t really a concern last election.

    However, #29, you are mistaken. The RBA would raise interests and “put the final nail in the coffin” if the economics of the day demanded it. They have repeatedly said so.

    I too think that Dec is more likely than Nov (though Nov is strenghtening), but please don’t tar the RBA with charges of bias like that.

    We’ll know a lot more about what the RBA will do once the inflation data comes out on Oct 24.

    As a side note, that is also a good reason for Rudd to keep his tax policy quiet until OCt 24 too (or later).

  32. El Nino said

    Thanks, CB (#29). The second May post that you cite is exactly where I was going. As for rates being at “relatively low levels by the standard of recent history”, it depends on your definiton of “recent”. Rates have not been at 6.5% since 1996. For most people under forty, they would have only known rates at “historical lows”. A world with cash rates in excess of 6.5% in new territory for them.

  33. El Nino said

    #30 – further to the Sawford theory, here is an interesting tidbit from PM last night.


    “[the unemployment rate is] telling a good story in the sense that unemployment is clearly falling and the economy is clearly doing well. But the thing to remember is that these are labour force unemployment figures. They are coming from the ABS (Australian Bureau of Statistics). There are other sets of figures that we could look at, like for example, the number of people receiving unemployment benefits, plus the number of men on disability payments. And these numbers are more of the order of 10 per cent or 11 per cent or 12 per cent.”

  34. canberra boy said

    Rate Analyst (#31) I think you are being a little didactic to say that I am ‘mistaken’ because you happen to draw certain conclusions from Glenn Stevens’ comments.

    Think about two things. First, AFAIK, his remarks about not shirking rate rises if circumstances warrant it during an election campaign have been made in response to media questioning or questions from a parliamentary committee. Given the statutory charter of the RBA, he could scarcely say otherwise.

    Second, the decision is one made by the RBA Board – not the Governor alone. Lets run through the members – all of whome owe their position on the Board to John Howard.

    Glenn Stevens, Governor, with a 7-year term to 2013. Ric Battellino
    Deputy Governor, 5-year term to 2012. Ken Henry, Secretary to the Treasury – a career public servant – worked in Keating’s personal Office. John Akehurst, Deputy Chair Coogee Resources Ltd, Director CSL Ltd, Senior Adviser McKinsey & Co. Jillian Broadbent Director, Coca-Cola Amatil & Woodside Petroleum. Roger Corbett Director Fairfax Holdings,Wal-Mart Stores Inc, former CEO Woolworths. Graham Kraehe Chair BlueScope Steel, Director Brambles Industries & Djerriwarrh Investments. Donald McGauchie Chairman Telstra, Deputy Chairman James Hardie Industries. Warwick McKibbin emminent but conservative academic economist, ANU.

    I would not defame these people buy saying that they will shirk their duty or make a ‘political’ decision. Nor am I making charges of bias. But setting interest rates is more of an art form than a science. There are often conflicting indicators and factors to consider.

    On 6 Nov the Board will consider those conflicting points, and they will also consider the fact that they have the opportunity to raise rates again on 4 Dec. The individual Board members will probably also think about whether they want to spend the rest of their lives being pointed at by the Coalition for having lost the election. For that will be the Liberal narrative if rates rise and Howard loses: Howard was steaming back into contention until the rats at the RBA torpedoed his ship.

    Have a think about those five business leaders, who they represent, who their friends are and where their interests lie. They will opt for caution. Despite Glenn Stevens’ remarks, he, Battelino & Henry will also not want to do something ‘political’ that they can avoid.

  35. David Gould said

    But there is also the point that they might not want to be accused by Labor of acting political – especially if Labor appear to be headed for victory.

    However, I do not think that they will care much either way. Their jobs are safe. They can do as they please. History will be their judge – economic history, not political history. Thus, they will make an economic and not a political decision. If the indicators are saying, ‘Put interest rates up,’ they will do so. If not, they will not.

  36. Enemy Combatant said

    ShocK! Horror! All right then, a wee bit of Awe!, too.

    Foreign Policy Split! Crawford Sleepovers In Jeopardy!

    At 1600 Penn today, President Bush awarded the Dalai Lama the Congressional Medal of Honor for services to the President’s credibility.
    Quite recently, El Rodente stiffed His Holiness’s polite request for a friendly pow-wow.
    Even the Exclusive Bretheren break bread with The Big D. Serious questions need to be posed pronto.

  37. stevet said

    Just seen on Crikey tips & rumours, tomorrow’s Nielsen poll good news for Labor, their primary vote has actually gone up!

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