For the first time in almost five years the Labour Party is "back in the game", as they are saying of Oracle. A climb of nearly seven points in our poll today is not only a remarkable gain, it has come at the expense of National rather than Labour's ally, the Greens.

The reason is more obvious than the cause of Oracle's recovery. Labour's recent leadership election brought the party more attention than it has enjoyed since it was last in power.

A public campaign for the votes of party members was high risk. It is a credit to all three candidates that it did not descend into unseemly personal conflict. It put a set of new policies in front of the public and produced the leader the party, if not the caucus, wanted. David Cunliffe is the preferred prime minister of 16.8 per cent of the poll, four points higher than David Shearer was in June, when Mr Cunliffe's public rating was negligible.

More important, Labour has reduced National's lead from 18 points in our previous poll to six points now.


National is down to 43.7 per cent, a more normal level for a government than the 47-48 per cent it has been scoring for so long. The Government had to surrender some of the limelight during the Labour election and may now struggle to regain its momentum.

But Labour cannot take this gain for granted. Public interest will soon fade unless Mr Cunliffe and the team he reorganised on Monday can find fresh issues and perform well. It needs to push its ratings much higher yet if it is to return to power at the election late next year.

As they stand in our poll today, Labour and the Greens together would have 49 per cent, probably enough on paper to form a government. But Labour's leadership contenders last month all acknowledged that a party needs a "4" in its score to lead a credible coalition.

Politicians understand this better than academics and commentators who simply add up the seats won by parties of the left and right. Instinct tells politicians the public would not respect a government formed by those that finished a distant second and third at the election, though their combined seats outnumbered the winner's.

Anyone who doubts this should take note of what is happening in Germany, which also uses MMP. Chancellor Angela Merkel's party clearly won the election held at the weekend though she did not win an absolute majority of seats and her previous coalition partner has failed to clear the threshold this time.

On paper, Germany's centre left parties could form a government but since Mrs Merkel's party won 41.5 per cent and her nearest rival, the Social Democratic Party, 25.7 per cent, there seems to be no question that her party remains the rightful Government. The only issue to be resolved in the next few days is whether it forms its next coalition with the SDP or the Greens, who appear to be open to the idea.

Every election New Zealand has held under MMP has awarded power to the party first past the post. The next election is unlikely to be an exception. Leaders of the main parties know a government needs more than a paper majority, it needs what Helen Clark called moral authority. That comes from winning.

Labour has shortened the odds mightily in this poll. If it can lift its numbers another few per cent at National's expense, the two parties will be level on around 40 per cent and well poised for the contest next year. Like Oracle, it has the momentum. Like Team New Zealand, National must be worried.