John Armstrong: Honeymoon is over for Mr Compassion

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After the roar of Don Brash's Orewa trilogy, John Key's sermon from Burnside is a comparative whimper.

Say what you like about Dr Brash, he would sharpen his claws at the start of the political year with a vigorous state of the nation speech.

John Key's first effort is a somewhat timid beast - perhaps deliberately so.

Yesterday's speech seeks to show Mr Key really is moving National towards the centre-ground of politics while coming up with policies consistent with core National principles.

But the theme he chose to demonstrate that shift - welfare dependence - may not have been the best option.

Dr Brash was unambiguous in wanting stringent welfare reform initiatives. Mr Key is at once saying he too wants welfare reform, while reassuring voters he is also a firm believer in the welfare state. The two views are not incompatible. They meld together in the phrase "compassionate conservatism".

However, with Labour adopting some (albeit mild) welfare reform measures of its own, it has become more difficult for National's new leader to come up with some of his own to differentiate his party on the issue while not drifting too far back to the right at the same time.

One option would have been to detail a new work-for-the-dole programme - something Labour will never adopt. But the speech said little about National's plans for such a scheme.

The other factor against using a welfare theme is that the number of beneficiaries has dropped substantially under Labour, especially those on the unemployment register. Welfare reform is not a "hot button" issue.

Mr Key's answer to that was to focus his speech on the dangers of an "emerging underclass" locked out of society and immune to the buoyant labour market. He cited the troubled state housing enclave of McGehan Close in Auckland's Owairaka as an example of somewhere where "the rungs of the ladder of opportunity" had been broken.

Promising new and imaginative thinking to arrest the drift of such areas into "social exclusion", Mr Key is challenging Labour in what it would consider to be very much its own territory - literally. McGehan Close is just metres outside the boundary of the Prime Minister's Mt Albert electorate.

To forestall criticism that he is not offering solutions either, Mr Key suggests as a starter that business and the Government work together to help low-decile schools feed deprived pupils who turn up every morning on an empty stomach.

This sounds like 19th-century philanthropy, rather than the welfare state. It illustrates Mr Key's inclination for pragmatic solutions. Dr Brash would have looked at sanctions against the children's parents.

The Wellington bureaucrats would run away in horror, but such an approach is consistent with Mr Key's intention to give voluntary organisations and private contractors a far bigger role in delivering social services in the community on the principle that the state cannot and should not do everything.

He wants to change the balance of Government spending on state-funded services more in favour of privately run organisations.

The Prime Minister's response was less to criticise him, more to smother him by saying Labour had been working with voluntary groups and private providers for yonks.

The lesson for Mr Key is that the centre is a crowded place. More immediately, the ho-hum reaction to "Burnside One" may signal the new leader's honeymoon is over.

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