Labour support plunges again

Labour's grip on power is looking decidedly shaky with a slump of almost seven points in the latest Herald-DigiPoll survey.

The gap between the Labour and National parties has steadily narrowed since April, when Labour led by 13 points. By late May, Labour's lead had been reduced to seven points.

Today's poll puts National ahead of Labour by almost four points, with no more than 13 weeks to an election.

Labour has now fallen to the same place National was a month ago, at 36.2 per cent support, a similar position to its slump last year after the Orewa race relations speech by National leader Don Brash. Labour took five months to recover.

The poll also points to a public relations nightmare for Finance Minister Michael Cullen, who is trying to convince voters that the country cannot afford substantial tax cuts. Two-thirds don't believe him. And one-third would support tax cuts even if they meant higher interest rates.

With no let-up in the debate over the meagre tax relief offered in the Budget - at worst, 67c a week in three years or the cost of half a packet of chewing gum - two June polls, UMR Insight and Colmar Brunton, showed National inching ahead of Labour.

This latest poll suggests that trend is increasing and that Labour's fightback has failed to stop it.

New Zealand First has also increased its support and continues to hold the balance of power. If the poll's party vote translated into an election result both National and Labour would need its support to form a Government.

Another sign that Labour's star is fading is the falling popularity of Prime Minister Helen Clark.

Added to that is the fact that fewer people think the Government is headed in the right direction than those who don't think it is (39.9 per cent compared with 50.8 per cent).

The last time the Government had such a negative rating was in February last year.

The proportions have long been in the positive for the Government, until last month's poll when the responses were even.

This time Labour falls 6.9 to 36.2 per cent, National is up 3.9 per cent to 40.1 per cent, NZ First climbs 3.6 to 11.8 per cent, the Greens are up 0.7 to 4 per cent, the Maori Party is up 0.4 to 3.1 per cent, Act is down 0.6 to 1.9 per cent and United Future is down 0.5 to 1.3 per cent.

Helen Clark is down 3.4 points as preferred Prime Minister, at the expense of rises for Dr Brash and New Zealand First leader Winston Peters.

But her support, at 48.8 per cent, is almost double the support of Dr Brash on 25. Mr Peters is up 1.8 per cent to 18.4 per cent.

Translated to MPs (and assuming all present party leaders with electorate seats kept them), the Parliament would have 52 National MPs, 47 Labour, 15 New Zealand First, four Maori Party, two United Future and one Progressive.

Act and the Greens, failing to reach either the 5 per cent threshold or an electorate seat, would disappear from the next Parliament.

Despite extensive and largely negative coverage over the prospect of New Zealand First holding the balance of power, as it did after the first MMP election in 1996, the poll shows the party still on the rise.

Mr Peters said last night that the "two old parties" had run a "targeted campaign to discredit us before we even get going and it's not succeeding".

Dr Brash said through a spokesman that the poll was further confirmation that New Zealanders liked the "sensible, mainstream policies" that National proposed.

The further bad polling news for Labour makes the four-week parliamentary recess all the more urgent.

The Government is using the recess to push particular themes - this week it is health.

It is understood that Helen Clark is planning to take a more active role in the tax debate, given her relatively high rating.

It is believed the long recess was planned by the Government with the possibility of an August 20 election in mind.

But with Labour support falling and such a date needing to be confirmed soon, that scenario is evaporating. It will need all the time it can get.

Since the Budget propelled tax cuts as one of the most defining issues of this election, Dr Cullen has sought to argue they could come only at the cost of cuts in services or higher borrowing.

He has also said that tax cuts risked pushing up interest rates through the stimulation they could create. But even that does not put off a large number of people.

When respondents were asked if they believed Dr Cullen when he said the country could not afford tax cuts, 27.6 per cent said yes, 61.2 per cent said no and 11.2 per cent did not know or refused to answer.

Asked if they would support tax cuts if they meant higher interest rates, 36.6 per cent said yes, 52 per cent said no and 11.4 per cent did not know or refused to answer.

* The poll of 800 respondents was taken between June 21 and 26 and has a margin of error of 3.5 per cent.