John Armstrong: Anyone willing to bet on election day in late July?

The Labour Party must be privately rubbing its hands together in glee at the escalating talk of an early election.

The more this feverish speculation feeds on itself, the easier it will be for the Prime Minister to argue that the chatter has become such a distraction, the country's wellbeing dictates an early date be set.

That final stage in this self-fulfilling prophecy is some way off, however. The Budget is still the best part of two months away. Labour will not want this showcase event overshadowed by an election looming in its immediate aftermath.

It is sufficient for now that voters are softened up to the possibility of an early poll.

That has already been achieved through Labour being the first party to finalise its candidate list, and the timing of next weekend's Labour Party Congress. The latter exercise - devoted almost entirely to election planning - is being held about six weeks earlier than in 2002.

But this flagging of Labour's readiness for an early election does not necessarily mean the party will definitely call one well before the latest allowable date - the last Saturday in September.

Helen Clark, ever cautious, has probably not made up her mind yet.

It was noteworthy that party president Mike Williams seemed to play down prospects of an early election on TVNZ's Agenda programme on Saturday.

That suggests Labour does not want the notion to get so many legs that it runs right out of control and forces the party to declare its hand too soon.

Labour wants to keep its opponents guessing - especially National, which faces a tricky task of releasing policy fast enough to whet voters' appetite, but not so fast that it runs out of material before campaigning gets under way in earnest.

The official Labour line is that Helen Clark wants the Government to go full-term. Doing so would underline one of Labour's big selling-points - the delivery of stable government. An early election would cut across that message.

But electoral circumstances are currently so advantageous to Labour that, around Parliament, the money is increasingly on the election coming forward.

As one participant observed on Agenda, it is not a question of why Labour would want to go early. The question is why it would not.

Bringing the date forward would mean less time for the centre-right to look like a viable alternative. Less time for National to push its policies, particularly its yet-to-be-unveiled tax cuts. Less time for rising interest rates and talk of an economic "hard landing" to induce pessimism and spark a sudden downwards spike in house prices.

On the other hand, Labour may be better to wait until low- to middle-income earners feel the sustained benefit of extra income from the Working for Families package.

The more time until the election, the more time for the Maori Party to run out of steam.

A winter election could cut voter turnout, to Labour's detriment. Above all, the party needs a plausible reason for going early.

Or does it? How early is "early"? Three years ago, Labour brought forward the election by four months from the traditional November timing to July on the pretext that its coalition partner, the Alliance, had fallen apart.

It will not have that excuse this time. But bringing things forward by a few months should not cause much fuss.

That timing neatly coincides with a gap in the All Blacks' schedule between the departure of the British Lions and the start of the Tri-Nations series, thus avoiding the big no-no of election day clashing with a rugby test.

The May 19 Budget is effectively the last fixture on the Government's timetable. The Budget wash-up should be completed by June 23, when Parliament is due to go into a lengthy recess. That would provide the obvious cue for an election a month later.

What odds, then, on a Saturday in late July?