Key Points:

John Key's most memorable phrase during the National Party conference was the observation that it's "better to win ugly than to lose tidily". Key was talking about the Australian elections, but it also acted as a warning - and advice - to Labour. That advice is slowly seeping in for Labour under leader Andrew Little. Elections are fought and won with several critical ingredients: Policies, money, candidates and propaganda. Under MMP another critical element is coalition deals - ranging from wooing possible partners in advance to strategic voting. Labour is taking a more pragmatic approach to issues from fundraising and deals in electorate seats to putting aside its old resentment against the Green Party as it strives to show it's ready to run a coalition Government. Here we look at Labour's progress in the fight to win next year's election.

The policies

The big three areas for Election 2017 are shaping up as taxes and the economy, immigration and housing. Little says Labour had too much policy in 2014, which confused voters. Next year it will have four or five "bold policies" on issues such as housing. Little has also benched two of Labour's more controversial policies - a broad capital gains tax and an increase in the retirement age.

Immigration: The nuclear option?

Should Labour resort to a nuclear option to get a quick boost in the polls, immigration is the most likely area. It has been an itch scratched in the Donald Trump rise in the United States and the Brexit vote in Britain. Immigrants are being blamed for everything from low wages to expensive houses by NZ First. It is potentially fertile soil. And Labour under Little has already started inching down that path. It has developed a more protectionist hue in its call to restrict foreign property buyers, tighten up the migration of semi-skilled workers, and in opposing the Trans-Pacific Partnership. National's Immigration spokesman, Michael Woodhouse, predicts it will be a feature of the campaign. He lumps Labour in with NZ First as responsible for "thinly-veiled xenophobic rhetoric". The nuclear technique worked well for former National leader Don Brash for his Orewa "one law for all" speech on so-called Maori "privilege". But getting rewards out of immigration will not be easy for Labour. It will have to do it without beating the race drum. Labour has made that harder for itself because of its use of Chinese surnames in its attack on foreign buyers and the Indian chefs example Little used to illustrate restrictions on semi-skilled labour. Nor will it necessarily get good results. University of Auckland academic Jennifer Lees-Marshment says the issue is not as volatile in NZ as overseas. Little agrees. He says immigration might have been the driving force in Britain, but NZ has more control over its immigration. "What I've said is we ought to adjust the number of work permits we issue based on the state of the economy, but I wouldn't go any further than that." But Labour is likely to continue its crusade against foreign buyers. Insiders say the party's own polling showed it got a poll boost from the Chinese surnames push. It didn't last, and there were political consequences. It was clumsy, although Little insists it did resonate for Aucklanders. "If you were in the property market, turning up to auctions and you know the person who ends up buying the house is someone on the other end of the phone and overseas, that is a big story in Auckland. So I don't resile from any of that." But the party cannot afford to repeat that tack. It upset Labour's base and, in particular, its ethnic constituency. A decade earlier Labour had delivered an apology to Chinese settlers in New Zealand for historic discrimination such as the poll tax. The party is not helped by the fact its caucus is bereft of Asian representation while National boasts Korean, Chinese and Indian MPs. That situation is, as a senior Labour MP said, "embarrassing". The party is now relying on Clayton Cosgrove leaving soon to allow it to bring back Raymond Huo. There is already talk about striking a deal with Maryan Street in return for her forgoing her place on the list. That would see Little promising to put a euthanasia bill up should Labour get into Government.


Labour's immediate focus. Three housing-related announcements are expected to challenge the plans National has made on everything from affordability to homelessness. Little says he gets a sense that many voters are not focusing on domestic politics at the moment, but tackling issues such as housing will be the recipe for success when that attention returns in an election year. "My sense is there are a lot of people disillusioned with the current Government, looking around. "Our challenge is to make ourselves heard on the things most people are concerned about. Housing is a massive issue. Even amongst reasonably comfortable people the idea of the level of homelessness in New Zealand, people are deeply uncomfortable with." And parents are concerned about their children's ability to buy a home. Economy and taxes Tax is set to be a key dividing line in the 2017 election - National has all but promised to run on a campaign platform of tax cuts while Labour will set out some tax increases to pay for its policy promises but will wait until after the election to do an overhaul of the tax system. It has also promised to campaign on any major changes in tax before implementing them. The Brexit issue will still be alive during the 2017 election. Expect National to grab hold of that to push home the stability message and to try to get political capital out of Labour's opposition to the TPP trade deal as New Zealand moves to negotiate a free trade agreement with Britain and the EU. Labour finance spokesman Grant Robertson is charged with puncturing the perception National is better at economic management than Labour. "We can provide good stable government like we've done in the past, but good stable government with a purpose to help every New Zealander achieve their potential," he says. He doesn't think Brexit will be a big issue, "but the underlying issues round whether people are feeling the benefits of the economy certainly will be."

The candidates

Former party president Mike Williams says an ability to attract good candidates is a sign of strength in a party. Labour has already selected a handful of electorate candidates. While it us up to individual electorates to decide when to hold selections, it is aiming to get candidates in marginal seats selected as early as possible to give them a solid run up to the campaign. Among its picks is first-time candidate Duncan Webb, a Christchurch lawyer and former academic who has acted for home owners dealing with their insurance claims. Webb will stand in Christchurch Central, long a safe Labour seat but won by National's Nicky Wagner in 2011. Webb's job is to win it back. Williams said he tried in vain to recruit Webb some years ago. Webb, in his late 40s, says he's standing now because of frustration about Christchurch's recovery process. "I think what's going on in Christchurch is absolutely appalling and you can't fix it one person at a time, there needs to be a change of management at the top. The recovery ... has been appallingly led." He says Labour's difficulties in the polls have not put him off. "It's a chicken and egg problem. What we need is a wave of really good-quality candidates and once we get that, I think that will show the electorate that Labour is genuinely ready to become involved and take the reins." He says for him the defining difference between Labour and National is: "National wants to move the middle, but doesn't really also account for people who are never really going to make it very far in life." The party is also tightening up its list candidate selection process. That was described as "dominated by a gaggle of gays and self-serving unionists" by MP Damien O'Connor in 2011. The changes are effectively an admission he was right, although nobody will say it in quite the same way. Labour is holding a special conference tomorrow to pass changes to the old process. That will allow individual party members in each region to vote on their region's list before a much smaller, strategic group of the party's ruling council and three MPs makes the final decisions. Party president Nigel Haworth says that is to try to ensure candidates are selected strategically. The party has also released a list of the types of background it wants its candidates to have. That includes health and business - areas it lacks representation in.

The deals

Little moved early to sign a memorandum of understanding with the Green Party, partly to ensure the parties did not take pot shots at each other during the campaign but also to present a cohesive partnership ready for Government. Labour has criticised National's deals in Epsom and Ohariu in the past, but the Northland byelection taught Labour some of the value of it. NZ First leader Winston Peters' win restricted National's ability to get a majority in Parliament by removing a National MP. That in turn gave Labour the numbers to get measures such as the Paid Parental Leave Bill passed in Parliament, forcing National to veto it. It also stymied National's Resource Management Act reforms again. The Greens agreement is likely to result in some deals on electorate seats. There are about six contenders for such deals. They include Auckland Central to take the seat from National's Nikki Kaye, Christchurch Central to wrest a once-safe Labour seat back from National's Nicky Wagner, and Ohariu to try to block out United Future's Peter Dunne. But the Greens will be reluctant to pull candidates from areas it polls strongly in, such as Auckland Central. Labour will also not want to ask too much from the Green Party - it will not want to owe the Greens too much by the time post-election negotiations begin.