Labour leader Andrew Little admits his party's performance in a new poll is "not flash" but he says he is getting a more positive message from the people he speaks to on the street.
The One News Colmar Brunton poll showed Labour had fallen three points to 27 per cent. National also fell by 2 points, meaning neither party could form a government.
Little dropped in the preferred Prime Minister rankings to fourth place, behind Prime Minister Bill English, NZ First leader Winston Peters and Labour deputy leader Jacinda Ardern. His polling of 5 per cent in this category is the lowest for a Labour leader since 2009, when Phil Goff was in charge.
Speaking to NewstalkZB this morning, Little agreed that the polls were not heading in the right direction, but he said he remained confident.
"I go on the basis of the feedback I'm getting literally every single day, when people stop me in the street and say it's not right what's happening to New Zealanders, it's not the New Zealand that we ever expected, and we're looking for a change."
His message was that the only way to fix New Zealand's problems, with homelessness, overcrowded schools, and under-resourced policing, was to change the government.
Asked what he could do to reverse the trend, Little said he believed Labour's campaign would have an impact.
"Campaigns make a difference, campaigns are important. We have a very strong message, we've got an amazing team in terms of the caucus and new talent coming in. I'm feeling very confident about this, that we'll be going guns blazing."
English also fell by three points as preferred Prime Minister and Peters was up four points.
New Zealand First and the Green Party are up two points on the May poll after the Budget, to 11 per cent apiece.
The Maori Party is up to 2 per cent, and Gareth Morgan's Opportunities Party is steady on 1 per cent. Act and United Future don't feature.
If translated to votes, and if the Maori Party, Act and United Future kept their electorate seats, the parties would have the following seats in a House of 122: National 57, Labour 33, Greens 14, New Zealand First 14, Maori Party 2, Act 1 and United Future 1.
Under that scenario, National would not be able to form a Government with its current support partners, Act, United Future, and the Maori Party. It would be short by one seat.
But it could with New Zealand First.
Labour would not be able to form a Government with only the Greens and New Zealand First. It would also be short by one. It would also need the Maori Party.
Peters is on a regional tour of New Zealand ahead of his party conference this weekend in Auckland.
English yesterday listed a series of regional visits and announcements the Government is planning this week, but at his post-Cabinet press conference he denied it was in response to Peters' regional activity.
"I'd suggest the opposite," he said.
Peters' activity in the regions was a response to the Government having been working with them constructively for several years, English said.
"He'll be finding that their economies are a good deal more robust and growing well compared to what he was saying.
"So no, we are not sensitive at all. Mr Peters has now found the map. He is out there discovering these places. We've been there working for a long time."
Commenting on the stoush between the Green Party and Peters after Green co-leader Metiria Turei accused him of having "a very racist approach to immigration" during a weekend interview on TV1's Q+A, English said: "It just makes it pretty clear that the proposed Labour Greens New Zealand First coalition would be inherently unstable because their internal differences are deep."
The dip for Labour and National has occurred after both parties were engulfed by controversies: English over his handling of the Todd Barclay secret recordings, and Little over the scheme to bring in 85 foreign interns to help Labour campaign.
The poll of 1007 eligible voters was conducted July 1-5. It has a margin of error of plus or minus 3.1 per cent. Party vote undecideds stood at 19 per cent (up 2).
National 47 per cent (down 2)
Labour 27 (down 3)
Greens 11 (up 2)
NZ First 11 (up 2)
PREFERRED PRIME MINISTER
Bill English 26 per cent (down 3)
Winston Peters 11 per cent (up 4)
Jacinda Ardern 6 per cent (steady)
Andrew Little 5 per cent (down 3)