KEY POINTS:
By the end of next week, Prime Minister Helen Clark should have set the date for the election and the campaign proper will be under way.
Labour has had a difficult year and its only option has been to hold its nerve until the election campaign neared, when the opportunities to pull back National's lead would eventuate. National's concern this year was, with its astronomical poll leads, that its troops would become complacent and be lulled into a false sense of security.
National strategists' unease was well-founded and events during the past fortnight will have them sweating.
The public gaffe on road tolls by National's Maurice Williamson was clumsy, but it wasn't the only one. Instances like this, where future Cabinet Ministers openly promote privatisation and user-pays, remind their potential soft voters of the bad days when National was last in power.
Williamson is obviously out of touch with mainstream New Zealand. Why else would he say that workers won't mind paying $50 a week if it meant they got to work faster on toll roads? Effectively he's saying workers should pay a tax to get to work on time. National leader John Key has once again had to smooth over this sort of idiotic approach.
The lingering impression reminds voters that National may not have changed its right-wing spots after all. Labour, of course, has jumped on these utterings and is building its case that there is, indeed, a secret agenda by a right-wing cabal within National. The ongoing leaks from within the National caucus reinforce that all is not well in the Key-English political family. If Labour can cement this impression during the campaign, a lot of soft middle voters may get nervous and jump back to Labour.
I don't think anyone is expecting Labour to overtake National in popular support before the election. But under MMP, they don't have to beat them - just get close enough.
The polls in the past two weeks must give real hope to Labour strategists. The gap between these two parties is closing to single digits. Experienced campaigners know if Labour gets within 10 points of National, it has a chance of pulling off a record fourth term for Helen Clark. Labour's ally, the Green Party, is certain to be returned in greater numbers. Add that to Labour's numbers and the gap closes to almost the margin of error.
The Nats can count on Act and United Future, but both parties have little support. If they increase their vote, it will be at the expense of National and will make no difference to the overall number of MPs in the right-wing bloc.
If Act lifts its vote, Labour will mercilessly claim, with some justification, that Roger Douglas would get into Cabinet and tip a potential Key Government further to the right.
Key has had to say he doesn't want to do a deal with Act, but its leader Rodney Hide would hope he doesn't have a choice once the final numbers come in. Key has gone out on a limb and denounced Winston Peters and ruled him out as a coalition partner.
At present, that's a shrewd position to take, but he'd better hope Peters is charged with something by the police or the Serious Fraud Office. If not, Key may have created a nightmare in which Peters is able to convince enough of his old support base to return him to Parliament.
NZ First is polling about 3 per cent and you wouldn't want to put money on the possibility that Peters can't pull off one last trick. If Peters is returned, it would be at least six more seats for Labour. Even more interesting, it would give the National and Labour potential coalition blocs about the same number of MPs. This means the Maori Party would determine the outcome of the next Government.
The possibility of being kingmakers hasn't been lost on the party leadership. It appointed Te Tai Tokerau MP Hone Harawira to head its campaign and he has thrown down the gauntlet to both parties. There was an assumption the Maori Party would lean toward Labour, but that ignores the situation where their candidates are in fierce combat in the Maori seats. That is causing a lot of friction.
National has withdrawn its candidates from the seats and is schmoozing the Maori MPs.
Labour and National know the Maori Party is the only party genuinely unaligned to either of them. Of course this new leverage will ensure that the main parties are on their best behaviour with them.
Instead of the Maori bashing Don Brash indulged in last time, we'll have Key doing lots of Maori cuddling. Clark told the Maori Party last time it would be the last cab off the rank when it came to coalition talks. This time I've no doubt she will send her personal limousine to pick them up.
With the narrowing of the polling numbers and the write-off of Peters by Key, the electoral arithmetic has changed. It won't be long before the chattering political classes realise the possibility that the election's outcome could be determined by the newest kid on the block - the Maori Party. Won't that drive them nuts.
