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Child health researcher Dr Liz Craig's selection was announced yesterday. She was the sole nominee.
Dr Craig is one of a group of child poverty advocates who put the issue on the national agenda by compiling an annual child poverty monitor.
In 2014, Dr Craig contested the Clutha-Southland seat, and while never expected to win, made an impact in the National stronghold.
It is hoped that despite being relatively unknown in Invercargill, Dr Craig can revive Labour's flagging electoral fortunes in the provincial city. Between the 2005 and the 2014 elections, Labour lost nearly 6000 party votes in Invercargill.
In Dunedin this week, Labour leader Andrew Little pointed out Labour had held the seat before, with Mark Peck.
Asked if an outsider could make an impact in Invercargill, he said Dr Craig was a determined candidate and had been a good campaigner.
However, Dr Craig will find it difficult to unseat first-term National MP Sarah Dowie, who won the seat with a 7482-vote majority and is popular in Invercargill.
Political commentator Colin James said Dr Craig would struggle to win the seat, but could improve the party vote.
"But they do badly need to win provincial city seats.''
Discontent in the regions had become apparent, most notably in last year's Northland by-election, but New Zealand First was benefiting rather than Labour, Mr James said.
"Labour doesn't connect well with middle New Zealand, the sorts of people who give National its majority.''
But Dr Craig believes there are plenty of issues to fuel her campaign.
She told the Otago Daily Times Invercargill was part of an "experiment'' in selling state houses - it is one of two cities whose entire stock is on the block.
There were unanswered questions about the proposed privatised social housing model.
"What happens if [the Government] change their mind, and us and Tauranga are the only ones that don't have state houses?''
"What happens if the local [social housing] provider goes defunct?''
She believes the under-funding of public services and lack of full-time jobs are key issues for her campaign.
Dr Craig will be based in Invercargill, where she is studying Te Reo at the Southern Institute of Technology. She will work part-time at the University of Otago.