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Fran O'Sullivan: Key's eyes on election as he breaks out the cheque book

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Billions for big cities leave Labour high and dry in crucial 2014 terrain

The PM's largess has neutralised political flashpoints in the two places where National had been out of step with local wishes. Photo / Dean Purcell
The PM's largess has neutralised political flashpoints in the two places where National had been out of step with local wishes. Photo / Dean Purcell

John Key's lip-smacking munificence has been writ large as he moves into agenda-setting mode in Auckland and Christchurch, the two cities that will decide next year's election.

Key's spreading plenty of pixie dust about, promising multi-billion-dollar transport projects in Auckland - including the City Rail Link which his transport ministers have seriously dissed - and big-ticket projects in earthquake-savaged Christchurch, like a new convention centre.

The strategy is obvious.

Neutralise potential political flashpoints on issues where the Government has been on the back foot and out of step with local wishes; and drive a wedge against Labour by taking the high ground ahead of the forthcoming local body elections.

It's smart politics.

And somewhat galling for Key's political opponents who have lost a potentially valuable stick with which to beat up the Government.

Labour's Auckland issues spokesman, Phil Twyford, was yesterday reduced to carping about the cost of the city's transport projects and complaining that the timing for some of the construction was still vague.

"The Prime Minister is talking about a $10 billion commitment to three projects but in his speech he was completely silent about how he is going to pay for them.

"Where on earth is the money coming from?"

Key could have said "You work it out chump, I'm unlikely to be PM by the time a future New Zealand Government has to seriously put its hands in its pockets".

But he later confined himself to telling journalists it could come from various sources, including (take that, Labour!) the Future Investment Fund, into which his Government is tucking the proceeds of its partial privatisation programme; the Land Transport Fund, which holds the proceeds of petrol excise tax and road-user charges; taxpayers through the Consolidated Fund and even the private sector through some nifty public/private sector partnerships (PPPs).

What Key didn't say - and won't until the Government has surety on the numbers - is that the fiscal track is on an upswing and there is a strong possibility Finance Minister Bill English will be able to post a Budget surplus well before 2014/2015 (some Beehive insiders suggest the surplus milestone could be reached even by the end of this year, though that looks optimistic).

When I put the question to him down at the media scrum at SkyCity's conference centre, Key deftly sidestepped it.

But he later conceded that getting government debt down to under 20 per cent of GDP would be the next priority.

In other words, yes, the fiscal track is moving very nicely, thank you.

It must be excruciatingly dreadful for Labour.

Its "show me the money" challenge (delivered without the panache that Key used to slaughter former Labour leader Phil Goff during a debate at the last election) fell flat. Its party strategists know that pushing that line of questioning simply risks Labour being seen as churlish.

But what really galls the Opposition is the fact that Key has stolen Labour's thunder, particularly in Auckland.

Key is now "besties" not only with Auckland Mayor Len Brown, who was positively radiant as he openly rejoiced yesterday that the Government was "backing Auckland", but also with Christchurch Mayor Bob Parker.

Brown will pocket Key's commitment as an endorsement of his own mayoralty, given that he based his first run at the top job on delivering three big-ticket, next-generation transport projects.

And Christchurch mayoral challenger and Labour MP Lianne Dalziel was reduced to complaining from the sidelines as Key and Canterbury Earthquake Recovery Minister Gerry Brownlee cosied up publicly with Parker to announce agreement had been reached on $4.8 billion of investment in Christchurch - $2.9 billion of it coming from the Crown and $1.9 billion committed by the Christchurch City Council - so that projects like the new stadium and a convention centre can proceed.

Key couldn't resist having a flick at Labour during yesterday's stand-up, telling reporters he could understand why the public wasn't warming to Labour because it was "too negative".

The big question is how much further the PM will drive the knife in; particularly as speculation has now been sewn that Labour leader David Shearer has been given two months to turn his party's dismal poll showing around or face questions over his leadership.

The parallels with Australian Labor leader Julia Gillard are obvious. Their respective publics warmed to neither of them.

The posturing was obvious at the US Embassy's Independence Day festivities (celebrated early) in Wellington on Wednesday night.

Shearer and two potential leadership pretenders - Grant Robertson and David Cunliffe - maintained a studious distance from each other.

As for Key's senior Cabinet ministers, they were no-shows - staying on in the Beehive after Gillard called the snap leadership vote, to prepare a congratulatory statement on Labor's new leader and commiserations for the outgoing Australian PM. They won't be so hasty if Shearer follows suit.

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