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Many political commentators have categorically dismissed the possibility that Labour can win next year's election.

They say John Key is popular compared with Phil Goff, and the Labour Party is not polling all that well compared with National. At first glance, this all seems to be true.

However, a more careful analysis of the polls and the facts surrounding them reveals a possible significantly different outcome, one which would put Labour back into government next year.

Politics is a volatile business. I have seen much larger swings since I have been in Parliament than would be needed for a Labour-led victory next year.

For example, Roy Morgan polls over the past six months show National and its support parties tracking downwards, with the latest (October 17) showing their support has dipped to 55 per cent from a high of 58.5 per cent in July. Meanwhile, Labour and its support parties have slowly but steadily tracked upwards - support now at 45 per cent compared to 41.61 per cent at the 2008 general election.

More importantly, the confidence rating for the Government is down from a 72 per cent approval level late last year to the current 60.5 per cent. The disapproval rating over the same period has increased from 16.5 to 24 per cent.

But the most critical factor, crucial to victory, is the National-held "marginal seats", many of which have been traditionally Labour-held seats. Their importance in any election result has been largely ignored. We only need to look to recent state and federal elections in Australia to see how important these seats are in determining the outcome.

Both Julia Gillard and Tony Abbott spent what seemed like a disproportionate amount of their time in marginal seats. They knew only too well how important those seats were.

Marginal seats are often pivotal to election victory and that's where New Zealand's election next year will be won or lost. Currently, the National-led coalition Government of four parties has 16 more seats in Parliament than the Labour-led opposition of three parties. How many more seats does Labour have to win to be in a position to form the next government by having more seats than National?

The answer is only nine seats - if the nine seats are won by Labour off National and Labour wins all its current seats.

In Labour's favour, National has nine "marginal" seats which would be lost to Labour with a swing of less than 3 per cent.

These seats are: New Plymouth, 0.2 per cent swing (with a majority of 105 votes); Waitakere, 1.16 per cent (632 votes); West Coast-Tasman, 1.4 per cent (971 votes); Ohariu-Belmont 1.3 per cent (1006 votes); Otaki, 1.8 per cent (1354 votes); Auckland Central, 2.2 per cent (1497 votes); Hamilton West, 2.5 per cent (1618 votes); Te Tai Tonga , 2.8 per cent (1049 votes) and Maungakiekie, 2.9 per cent (1942 votes).

And then, of course, there is Wigram, an additional seat which I hold but, in my view, Labour will win, now that I am retiring from Parliament.

In the five MMP elections since 1996, an average of eight seats has been gained (or lost) by either National and Labour-led coalition parties. This history gives substance to my claim that a change again of eight seats at next year's election is highly possible - particularly given the number of genuinely marginal seats held by National and the fact that Rodney Hide is unlikely to win Epsom again, which reduces even further National's option for seats from support parties.

As far as the "party vote" is concerned, the clear evidence is that where a major party is picking up electorate seats from its opponent, it is also increasing its share of the party vote.

Many Labour voters supported John Key in 2008 because they liked him. But I am predicting they will come back to Labour as the GST hike, growing unemployment and a sluggish economy hit.

New Zealanders want to give people a fair go. It's part of our DNA. And they have given John Key a fair go. But they will be asking themselves whether smiles at the helm are going to help pay the bills at home. Key is also increasingly being seen as a populist rather than as a leader with a long-term strategy to revive the New Zealand economy. In fact, his prediction that the economic recovery would be aggressive has turned sour, with his Government running up a $13 billion cash deficit, more than enough to send the country back into recession.

Voters will also learn that a second term of a National-led government is likely to mean more privatisation of essential state assets like electricity companies or even Kiwibank to pay for the $14.3 billion tax cuts (over the four years from October 1, 2010) which really only benefit the most affluent New Zealanders. This is in addition to significant cutbacks in health, education and housing.

I expect the political gap to close further and quite suddenly, catching many by surprise. I also expect John Key will call an early election: the Government will not want to campaign while the Rugby World Cup is on next September and October.