National marches on Labour turf

Has Labour miscalculated?

Its campaign launch tomorrow will have all the glamour of any event held at Auckland's waterfront on the viaduct. That decision was no doubt deliberate.

If ever there was an occasion when Labour needed to put on its game face it's the campaign launch, when it needs to convince the punters it is still in the game.

A party atmosphere can hardly hurt.

But National has stolen a march on Labour by launching its own campaign in two weeks from Manukau in the heart of South Auckland, traditional Labour territory.

Given that this is where Labour has placed much of its focus on turning out several hundred thousand voters who went awol in 2011, the challenge thrown down by National is clear.

Don't just assume those voters will all go your way, is the inference that can be drawn from National's deliberate march into Labour's heartland.

John Key won't miss a trick in drawing attention to Labour's snub.

Since his earliest days as prime minister, Key has harboured a dream of extending National's support into heartland Labour areas like South Auckland, particularly among the more conservative Pacific Island communities turned off Helen Clark's government by its anti-smacking stance.

That is part of National's wider strategy of being a party with appeal to a broad spectrum of voters by reaching out to non-traditional constituencies.

The May budget, with its extension to paid parental leave and free doctors' visits showed National is not squeamish about cribbing policy from opponents to further this goal.

Labour has been slow to wake up to National's game plan.

Even Key's comments about targeting future tax cuts at low to middle income earners show the extent to which National remains focused on the strategy.

Given that it would take $3 billion to $4b that National doesn't have to achieve meaningful tax cuts in that low to middle income bracket, living up to the promise is proving nightmarishly difficult.

That will be underscored when the Government opens the books on the pre-election fiscal update later this month.

The ledger will be back in the black - just - but only because anything less would be unacceptable politically.

But the forecast surpluses in future years might be flatter than expected as a result of Kiwi consumers proving more sensitive to interest rate hikes than expected, pushing tax revenue lower.

That makes it even harder for National's policy wonks to deliver tax cuts that are not so derisory they would only backfire. Think back to Labour's infamous "chewing gum" tax cuts worth the price of a packet of chewing gum.

Meanwhile, there are building pressures to address the "inequality" debate in other ways, such as low wages among the likes of aged-care workers. That is seen as a priority, since it would have a greater impact on those who need it most than tax cuts, which are hard to design at the lower end without indirectly benefiting those at the higher end of the income scale.

So National may confine itself on the campaign trail to a largely directional promise to cut taxes in its third term, rather than a more detailed breakdown of the numbers.

Given where the polls are at, that's probably all it needs to do. Winning may not be a given yet, but failing to deliver a hefty tax cut won't be the explanation if there is a sudden change in voter sentiment.

Losing is not a given for Labour either of course. If it can lift its vote to north of 30 per cent, and the Greens also rise, it's game on.

No one is ruling that out, least of all National's senior strategists, who know that anything less than 46 per cent or so could leave them in a precarious position.

But that assumes Labour is as hungry for power as it is hungry for war within its own ranks for control over the future shape and direction of party.

For years, Labour successfully papered over the divisions between its left and right factions, thanks largely to the iron-clad control of Helen Clark.

But the last few years have seen it re-erupt to the extent that both sides seem hell-bent on giving the impression they might even relish the prospect of a loss on September 20 so they can blame the other for engineering it.

The party's left faction are already talking up a caucus purge and de-selection after the election.

This is also a fight over whether David Cunliffe should stay on and lead the party in the event of defeat.

Those who believe he must stay are ranged against those in the caucus who they see as wanting to use defeat as an opportunity to roll Cunliffe.

Cunliffe's office doesn't even bother to hide the divisions between the caucus and the wider grassroots. One senior adviser called recently to take issue with a statement that the grassroots had grown increasingly distant from the party. Their complaint was not that it was untrue, but that it was the other way round - the caucus had grown distant from the grassroots.

In a further sign of the depth of divisions within the party, there doesn't even seem to be agreement over whether Labour should be seeking to maximise its vote - something referred to as the "40 per cent strategy".

Since, on the surface, this is merely a statement about where Labour should aim to be in the polls to win such a strategy would seem to make perfect sense.

But when former Labour MP Shane Jones picked up on the "40 per cent" catch cry and made it the focus of his leadership pitch in 2012 it was a red rag to a bull to many of the activists.

Jones' pitch was a simple push-back response to the extent to which National had encroached into Labour territory.

But the underlying premise was that the Greens and the likes of Mana must be correspondingly weakened (or in the world of Jones destroyed) for Labour to succeed.

In Labour's weakened state, it is understandable that many see that option as suicide.

But fretting about being too popular seems like it should be the least of Labour's worries.