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UPDATE 1-Support for NZ's Labour Party improves position as frontrunner in election race

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  1. A file photo of New Zealand's new opposition Labour party leader, Jacinda Ardern, speaking during an event held ahead of the national election at the Te Papa Museum in Wellington, New Zealand August 23, 2017.
    • Support for NZ's Labour rises 1 point to 44 pct in One News Poll
    • Poll averages still show the two major parties neck-and-neck
    • NZ dlr edges down slightly after poll released

    (Updates currency reaction, adds poll details)

    WELLINGTON, Sept 14 (Reuters) - New Zealand's Labour Party on Thursday promised no surprise new taxes until 2020 and improved its position as frontrunner in a national election, with a poll showing its support edging up, threatening the National Party's ten-year grip on power.

    The result was at odds with a shock survey by another pollster this week that put the centre-right National in the lead and underscored the unusually volatile nature of the race to the vote on Sept. 23.

    Backing for the Labour Party rose 1 point to 44 percent, the One News-Colmar Brunton poll showed, while support for the National Party also gained 1 point, putting it at 40 percent.

    In another positive sign for Labour, its potential coalition partner, the Green Party, recovered, rising 2 points to 7 percent, comfortably above the 5 percent threshold needed to gain seats in Parliament.

    The nationalist New Zealand First Party fell 3 points to 6 percent, making it less likely that Labour would need the populist party to form a coalition government after the election.

    Poll results have been swinging wildly and a separate Newshub-Reid poll on Tuesday had shown a surprise surge for National, giving it a robust lead of almost ten points.

    The National Party has vowed to support free trade as global protectionism rises, in particular, by championing the Trans-Pacific Partnership pact, which Labour has said it would renegotiate.

    An average of polls released by Radio New Zealand on Wednesday, which included the results of Newshub's shock poll, put the two parties at almost even support.

    Thursday's poll was published on the same day Labour moved to stem criticism of a plan to set up an expert panel to consider new levies, such as a capital gains tax.

    "To avoid any doubt, no one will be affected by any tax changes arising from the outcomes of the Working Group until 2021," said Labour finance spokesman Grant Robertson, in a statement.

    As rivalry has heated up, Labour leader Jacinda Ardern on Wednesday called National "desperate liars" in response to an advertisement saying the centre-left party would bring in new taxes and subverting its slogan, "Let's Do This" into "Let's Tax This".

    Investors have been made jittery by the uncertainty over who will govern, but currency reaction to the latest poll was muted.

    The New Zealand dollar - the word's 11th most traded currency in 2016 - softened slightly to $0.7240 from $0.7250 shortly before the poll results.

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