KEY POINTS:
The honeymoon with voters is not yet over for John Key's minority Government. Indeed, Thursday's fracas at Waitangi may well extend its duration.
The Prime Minister will win plaudits for his composure after being manhandled by a couple of lone protesters and for his determination that the incident not deter him from returning to Te Tii Marae in future.
Once again, Key has displayed the kind of leadership that makes a nonsense of Labour's pre-election spin that he was too shallow and too inexperienced to hold the country's most challenging job.
Labour should worry that it misjudged Key so badly in the run up to last year's election, and that he is coping so comfortably with the demands of prime ministership, while building mana, prestige and authority in the process.
However, Labour will be heartened that the past week has witnessed a return to what might be termed normal politics, with Key and his colleagues being given more than a few, albeit gentle, reminders that marital bliss with the electorate is not eternal.
For the first time since being sworn into office in mid-November, the new Administration has had to cope with a flurry of problems from all directions while still ensuring it retains control of the political agenda. This will be the norm for National from now on.
This week was relatively easy. It was easy to threaten to crush the vehicles of errant boy racers. The same went for ticking off Transpower.
The wake-up call, however, was the latest household labour force survey showing unemployment rising by 10,000 in the final quarter of last year.
It is the jobless and economic growth statistics on which Key's Government will ultimately be judged. Everything else will be peripheral.
The release of the unemployment figures came in the wake of National's measures to help small and medium-sized businesses cope with cash-flow problems as the recession bites. Taken on its own, the $480 million package was widely welcomed as long overdue, but likely to be a drop in the bucket when the crunch comes.
As National's bad luck would have it, its release coincided with Kevin Rudd's $42 billion "nation building" stimulus package. Comparisons with the Australian Premier's huge economic injection - which includes one-off lump-sum payments to workers of up A$950 ($1208) - were unfair. The two packages had nothing in common, one being a red tape-cutting exercise as part of a wider rescue plan and the other a drastic, front end-loaded fiscal pump-priming exercise.
But comparisons were inevitable. More pertinently, Rudd's "big bang" response to the international financial meltdown raises questions as to whether the Key Government's strategy of staggering its initiatives is the right one for the economy.
It is surely the right one politically. As one Government source put it: "If we fire all our bullets now, what are we going to put in the Budget?"
Labour argues the importance of the Rudd package is that it shores up both household and business domestic confidence by demonstrating the Government will do whatever it takes to save businesses from going under.
In contrast, the drip-feeding of Government initiatives here is detrimental because it gives the impression the Government has no plan and what is left of business confidence is evaporating accordingly.
National has taken some of this message on board. Fiscal policy is complicated and confusing. Finance Minister Bill English will next week place some explanation and analysis into the public domain to show why things are happening differently here.
Essentially, New Zealand has been in recession for more than a year and the surpluses have dried up. When it comes to stimulating an already sluggish economy, National is relying on Labour's spending in last year's Budget, last October's tax cuts, this April's tax cuts, the drastic loosening of monetary policy by the Reserve Bank and, last but not least, the bringing forward of Government-initiated infrastructure building projects.
Australia has not been in recession. Rudd is said to be determined that gross domestic product, which is the measure of economic growth, does not fall into negative territory. That is why he is spending big. He has had plenty of room to manoeuvre given his Government's accounts have been in the black.
Even so, when it comes to the "fiscal impulse" being injected into the respective economies, New Zealand's is still larger than Australia's relative to gross domestic product.
However, while Governments across the globe are being urged to come up with stimulation packages, the reality is National does not have much more it can hand out without provoking a credit ratings downgrade.
So, is National's economic stimulus large enough to stop the economy plunging into deep and prolonged recession?
At this juncture, no one can answer that question. But plenty will do so in hindsight. For that reason and knowing that things are going to get tough, the Government's line is that its measures are designed to take the "sharp edge" off recession. It is promising no more than that.
In the meantime, it will continue to roll out measures at intervals, with Key next week unveiling a list of "ready to go" Government infrastructure-building projects to soak up spare labour in the construction sector.
Labour would have spent more infrastructure-wise had it remained in Government, partly because the second phase of its tax cuts would have kicked in a year later than National's and partly because the Opposition thinks more should be spent.
Labour does accept there are limits on how much more and shares National's view there must be "quality" infrastructure spending, rather than make-work schemes.
Where the parties differ is in David Cunliffe, Labour's finance spokesman, urging National to think again and cancel April's tax cuts because they favour the better-off and the extra cash will be saved rather than spent on consuming goods and services.
Fat chance of that happening. Key is not going to break an election promise. National also believes that progressive tax cuts are better than Rudd's one-off lump-sum handouts. Overseas research shows large one-off payments - described by Key as "sugar fixes" - tend to be saved rather than spent. National argues progressive tax cuts are more likely to be factored into household budgets and spent accordingly. Furthermore, lower taxes are a simple article of economic faith for National.
Whether National's strategy is valid will become apparent soon enough. The rising tide of layoffs in the United States and Europe has yet to reach these shores. However, one major domestic manufacturer is said to be about to offer its workforce the unpalatable choice of a 5 per cent cut in the wage bill or 5 per cent layoffs. Others must be in the same boat.
For Key, it is a matter of holding his nerve. The next couple of years are going to be one very tough test. Few Prime Ministers have survived prolonged recessions with both their job and reputations intact. He should enjoy what is left of National's honeymoon while he can.
