National's Northcote candidate (and former MP) Dan Bidois and National Leader Christopher Luxon campaigning in Northcote this week.

National will be buoyed, and Labour possibly slightly depressed after last night’s One News Kantar poll. National and ACT on 48 per cent with 62 seats between them, enough to form a Government.

Meanwhile, Labour was down one per cent to 35, and the Greens dropped four per cent to seven per cent.

That total of 42 per cent would give the centre-left only 55 seats, well shy of National’s 62.

Even with Te Pati Maori’s two per cent and three seats, the left would have only 58 seats.

However, National was not claiming victory.

Within minutes of the poll being broadcast, an email from party headquarters to members went out saying it showed how tight the election was going to be.

“With just five months to go, it’s clear it will come down to the wire,” the email said.

The email asked for a $30 donation from recipients.

Unusually, this year National has been getting lower donations than Labour.

Since the beginning of the year, according to Electoral Commission figures for donations over $20,000,  National has pulled in $237,000 while Labour has got $333,000.

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But the National headquarters’ view that the election will go down to the wire is one widely shared across the political spectrum.

At least two pundits, one from the right and one from the left believe that because of that, a Labour-Greens victory is more likely.

Writing in the NZ Herald today, former National and ACT advisor Matthew Hooton says The Herald’s Poll of Polls now points overwhelmingly to a Labour-Green-Te Pāti Māori (TPM) government after October 14.

“It suggests a 58 per cent probability of a Labour-Green-TPM coalition had an election been held last Saturday, a 25 per cent probability of a hung parliament requiring new elections, and a 17 per cent chance National-Act will scrape through,” he wrote.

And on the left wing “Daily Blog”, Malcolm “Bomber” Bradbury said he thought it highly unlikely now that National could win the 2023 election.

“If we look at John Key 180 days out from each of his elections, National was beating Labour by double digits, under Luxon, National are beating Labour by three points,” he wrote.

“National poll all the time, and the number they need to win by has to be in double digits to ensure it can win, National haven’t achieved anything like that since Key left Office, and it means a win this year is highly unlikely.”

However, Bomber’s thesis is only partly supported by experience.

The most recent close election was in 2005 when in the May One News Colmar Brunton poll, Labour was on 44 and National 37.

At the election, Labour dropped three per cent, and National went up two per cent.

Since then, for every election after 2005, National has averaged a fall from the May One News poll to the election of 5.6 per cent, while Labour’s numbers have fallen over the same period by two per cent.

The bad news for Labour is that every party in Government has seen their vote fall during election year over the May – election period.

Labour Party sources privately acknowledge that they have been hit by the defection of Meka Whaitiri, and the Greens have clearly taken a hit over the Elizabeth Kerekere mess.

Labour knows from its experience in the 1980s that the quickest way to lose electoral support is when the electorate believes there is disunity within a party.

But Labour must also be disappointed that the Budget has failed to fire up support.

Whilst it might have been fiscally responsible, it did not deliver any real relief on the cost of living, and that is an issue National is now hammering the Government on.

The best the Government might be able to hope for is that the Reserve Bank’s relatively optimistic outlook for the economy for the rest of the year holds true.

However, if the United States fails to settle its debt ceiling impasse, then that could quickly erode confidence in our Government, much as the Global Finance Crisis did in 2007 – 08, which brought the Key National government to power.

Karen Silk, the Assistant Governor/General Manager of Economics, Financial Markets and Banking at the Reserve Bank, told the Monetary Policy Statement media briefing on Wednesday that the Bank was monitoring the situation.

“Our concern is going to lie in the management of any spill-over effects on the financial system,” she said.

“So financial stability is obviously a core focus for us here, but we have the tools available to take if we need to resolve any market functioning, in particular liquidity.”

Labour, in turn, will be keen to exploit National’s gaffe over free prescriptions when Leader Christopher Luxon has to reverse the announcement by his deputy, Nicola Willis, that National would cancel Labour’s Budget proposal to end the $5 prescription charge.

The blunder gave Labour’s election team a tangible example to show when they claimed that National would make savage cuts to the welfare state to finance their tax cuts.

But ultimately, because the two main parties are so close, this election looks likely to come down to the election campaign itself, and that means a head-to-head contest between Chris Hipkins and Christopher Luxon.

Though Hipkins outpolls Luxon in the preferred Prime Minister ratings on the One News Kantar poll, he was down two per cent to 25 while Luxon was up one per cent to 18.

Though these movements are within the margin of error, they are probably enough to hearten National.

There are still major hurdles to come; Labour must cope with the inevitable fallout from its list when sitting MPs realise they do not have a sufficiently high enough position to ensure a return to Parliament.

If the economy begins to show signs of recovery later in the year, National will have to readjust its campaign.

And its big question will be that it does not know how Luxon will perform under the pressure of the campaign.

The election is too close to call and likely to stay that way for a while yet.

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