KEY POINTS:
Helen Clark was chuckling last week as virtually every poll showed the gap between Labour and National beginning to narrow a little.
Labour ministers were also chortling, not entirely accurately, that National had lost an average of six percentage points, one for every new policy it released in recent days.
Though hardly a seismic shift in the political world, that narrowing of the gap signals the start of the usual election-year trend of the two main parties coming closer together as the campaign looms nearer.
At the risk of repeating myself, anyone who was expecting National to win with more than 50 per cent of the total party vote was always in cloud-cuckoo land.
The Nats will almost certainly win the most votes of any party but whether that will be enough for the party to weld together a government is the big question because, apart from Act, it seemingly lacks the necessary natural allies.
That makes John Key's attacks on Winston Peters over his murky campaign donations either brave or stupid, depending how you look at it.
I have no doubt National's caucus is split over what strategy to adopt. Key's more conservative advisers will be telling him to go easy on Winston, as National may need his support after the election. Others will be advocating putting the boot in.
Key has been trying to avoid hammering Winston too much, instead targeting Helen Clark's handling of the affair, saying she shows a leniency to Peters she has never displayed to her own accident-prone ministers.
However, it is impossible not to hit Winston in the crossfire. In the end, John Key gritted his teeth and gave the New Zealand First leader a slap, saying if it was true Winston was soliciting big political donations and hiding them then that "smacked of hypocrisy".
Winston will never forgive him for that and National's only hope now is that New Zealand First will be thrown out of Parliament and Winston loses his role as kingmaker.
While Labour struggles to get some damage control in position on the Peters affair, National has continued rolling out its long-awaited policies.
There are no big surprises. Its ACC strategy talks of perhaps opening the system to competition from other providers.
Labour portrays this as "privatisation" but not many people seem to have bought that argument.
National's broadcasting policy talked of axing TVNZ's ill-fated charter but no one seems to have shed any tears about that, apart from the Government, which labelled it as a first step to, again, "privatisation".
Its arts policy was bland, and Labour argued it was a cut to arts funding because it would simply maintain the current funding levels.
There was an audible yawn from the public who only want to hear what tax cuts they might get - but that policy will not be released until the start of the campaign.
National's workplace policy was similarly innocuous and hardly a return to the much-reviled Employment Contracts Act. However, the Government and the unions went into all-too-predictable knee-jerk convulsions, labelling it "another attack on working people".
Jim Anderton went as far as to claim National would "effectively abolish four weeks' leave" for workers. In fact, National has simply offered workers the chance to cash the fourth week of leave if they want.
Many financially hard-pressed families might welcome the chance to get that extra money.
Labour is having an attack of the vapours over the evil National Party's plan to enslave the working class. Michael Cullen first accused the Nats of issuing "lightweight" policies, then foamed about "privatisation" and an "attack on workers' rights".
I am not sure Labour's Chicken Little approach to every National policy release is dong it much good.
Trapped in the mentality of the 90s, Labour portrays Key as a nasty neo-con Ruth Richardson in a tie. In fact, the National Party of the new millennium is really National-lite.
If Key has a brand it is "Diet Tory". A little bit of free enterprise mixed with a few milligrams of less government spending, but heavily diluted with a commitment to much the same social policies we have become used to over the past decade or so.
Labour strategists have become dangerously obsessed with trying to demolish Key personally and portray his party as having a secret agenda to sell everything and return us all to some kind of capitalist serfdom.
It is role-reversal. Labour has adopted the negative approach usually taken by opposition parties, allowing National to take a more publicly palatable positive approach to the country's future.
It is like Labour has looked six months ahead and has already decided it's the opposition - and maybe it is right.
