National gains on Labour

National is closing in on Labour and support for New Zealand First leader Winston Peters is on the rise, according to the latest Herald DigiPoll survey.

Tax has also emerged from nowhere as one of the issues of greatest concern to voters in the poll taken days after Michael Cullen's modest Budget measures to reduce personal taxation.

Tax was rated by 14.9 per cent as the issue of greatest concern, behind health at 18.8 per cent.

That is a big rise from the last poll, when 5.8 per cent rated tax as their prime concern.

National is up three and Labour down 1.6 points, which means the gap between them has narrowed from 11.5 points last poll to 6.9 now.

The poll also shows small moves in party support could have big consequences for coalition options.

The Greens fall 2.5 points and disappear below the 5 per cent threshold, severely limiting Labour's coalition options.

Labour and the Progressives would need either NZ First or the Maori Party to form a government, the furthest from its preferred partners of United Future and Greens.

National would be able to form a government, under the poll scenario. But its options would be equally unattractive to it, requiring the support of both NZ First and the Maori Party to get a majority.

Mr Peters' popularity as preferred prime minister has jumped just over six points to 17.1 per cent of decided voters, in a month in which he received huge exposure over immigration issues.

Prime Minister Helen Clark fell almost four points to 52.1 per cent, but there has been little movement in Labour's party support.

National has jumped three points to 36.2 per cent and National leader Don Brash is still the second most preferred prime minister, slipping slightly to 22.2 per cent.

The notion of Mr Peters leading a National-NZ First coalition was not as roundly condemned by voters as it has been by Mr Peters and Dr Brash - and not even overwhelmingly by National supporters.

The Herald reported last week that NZ First MPs had been quietly floating the idea to National, and that it had been floated with both National and Labour during the 1996 coalition talks.

Asked about Mr Peters leading a coalition with National, 45.7 per cent of poll respondents believed it would be better than Dr Brash leading it; 38.8 per cent thought it would be worse; and 15.5 per cent didn't know or refused to answer.

Of the National supporters who answered the question, 38.8 per cent believed it would be better than Dr Brash leading it and 52.3 per cent thought it would be worse.

The three leaders all put a positive spin on the poll last night.

Helen Clark said through a spokesman that the Government had been dealing with a range of difficult issues. The result justified her optimism about the coming election and showed that dirty politics from the Opposition did not work.

Dr Brash said it was looking more and more like a two-horse race.

"What is also pleasing was that the polls were closing before we've announced our plans for reducing the tax burden carried by mainstream New Zealand."

Mr Peters interpreted the poll as evidence of a three-horse race and believed the poll "massively" understated his party's support.

Preferred Party:
Labour 43.1%
National 36.2%
NZ First 8.2%
Greens 3.3%
Act 2.5%
United Future 1.8%
Maori Party 2.7%