Reports that John Howard has been leaning on the retiring member for the South Australian seat of Grey to recontest the electorate (held by a margin of 13.9%) suggest the depth of trouble afflicting the Coalition.

While there are suggestions that the “national polling” and the “seat polling” tell two different stories (driven both by wildly inaccurate interpretations of the aggregate Newspoll and the risible “betting markets” on individual seats), the parties don’t allocate campaign cash based on flawed and optimistic spin but on realities on the ground. If the firewall strategy now has to be built around seats held by the Coalition in some states by 10% or more, they’re in an astonishingly bad position.

There are important implications of the number and range of seats in play in the House of Representatives contest for decisions about the allocation of preferences in the Senate.

Sources from the Labor Party and senior figures in the Greens have a story to tell about how this dynamic is playing out in the Queensland Senate contest. I have been told that Queensland Labor has shifted campaign resources towards seats held by the Coalition by more than 8%. Labor’s position in more marginal seats is so secure at this stage of the game that there is little need to worry about preferences at all. So the party is going hunting for Family First preferences in outer suburban and regional seats which are poised on a knife edge.

Swinging voters in these seats are very much the targets of Rudd’s message on the cost of living and housing affordability, and many are also the social conservatives formerly known as “Howard battlers”. Securing Family First preferences is perceived as a significant message to them reinforcing Rudd’s Christian image, over and above the value the preferences themselves may have.

Although a week is a very long time in politics this close to the calling of the election, sources from both the Greens and Labor confirm that preference negotiations between the two parties have stalled, with the Labor machine men believing that a deal with Family First promises to bring much more gain for the ALP in the lower house.

Democrats Senator Andrew Bartlett has often emphasised that Senate preferences are not allocated primarily on the basis of ideological compatibility but rather on very concrete calculations about what the minor parties can bring to the table. Nor, as the current negotiations in Queensland demonstrate, are they necessarily focused on the Senate contest at all, but rather on who can deliver in closely contested house seats.

Making predictions about how the Senate numbers will fall is often akin to tea leaf reading in the absence of the final preference allocations. Nevertheless, internal party polling I’ve been briefed on shows the Greens still in a good position to win a seat in Queensland – with Larissa Waters’ primary around 7% and Andrew Bartlett’s around 5%. Of course, a favourable distribution of the Labor surplus would seal the deal for the Greens, but Labor are much more interested in harvesting the ripe pickings available in allegedly safe Coalition Reps seats.

Whatever the headline value of the pontification of the pundits on the polls, the real story about what’s happening in this contest is better told by observing where the parties are putting their campaign cash and what calculations on preferences are being made. Notwithstanding the current “media narrative”, it’s a tale of woe for John Howard.