Helen Clark has shown (yet again) that she is not averse to extracting political capital from a major financial crisis to suit Labour's election chances.
The manner in which Clark excluded National's John Key (once again he's been caught sleeping on the job) from any consideration leading up to the issuing of a $150 billion Government guarantee on New Zealand depositors' savings is pure arrogance.
If the position had been reversed, an angry Clark would have used her own formal campaign launch to accuse the former currency trader of betting the bank by taking on a contingent liability that the New Zealand Government has in fact no real ability to meet in full in the (unlikely) event that the country collapses.
But Key did the decent and only thing and extended National's approval when he was finally briefed some 24 hours after Clark made the guarantee the centrepiece of her opening statements.
Clark-watchers will not have been surprised.
At the 1990 election, then Reserve Bank Governor Don Brash and Treasury Secretary Graham Scott were instructed by the incumbent Labour Government not to tell their National opponents that the Bank of New Zealand was insolvent and needed a Government bailout.
At that election Clark, who was Labour's Deputy Prime Minister, was also the party's key strategist with sufficient steel to remove her boss, Sir Geoffrey Palmer, in a bloodless coup just before the election.
Then, like now, she was out to stem a potential election rout.
But the Bank of New Zealand was not the only timebomb set to catch the incoming National Government.
A major spend-up during sluggish economic times had caused a hidden blowout in the Government's books which led Labour's successors to introduce the Fiscal Responsibility Act requiring incumbents to issue updated economic and fiscal figures so no opposition could be ambushed again.
That might work in normal times.
But the international credit crisis has exposed huge weaknesses which are not addressed by the legislation.
The recent pre-election economic and fiscal update (Prefu) revealed New Zealand faces a decade of deficits. This is the upshot of recessionary times and out-of-control spending by the current Government ...
Finance Minister Michael Cullen knew about this weeks back. Cullen indicated he would have expected National to cancel further tax cuts once it got its hands on the books.
But the recession will now last much longer as a result of the international volatility.
This means the Prefu is already out of date, which puts the opposition at a disadvantage to the incumbent (which continues to be the beneficiary of frequent Treasury and Inland Revenue updates) when it comes to issuing policy.
NZ Institute chief executive David Skilling and NZX chief executive Mark Weldon have argued that the two contesting parties should be taking a much more adult approach in the circumstances.
The pair called for bold, preferably bipartisan, leadership last Friday, saying they understood the task was complicated by the election season but that business as usual is not appropriate given the changing financial and economic conditions.
As Clark proved, she was deaf to the message.
Just weeks ago, the Government privately briefed National over the melamine contamination at Fonterra's San Lu joint venture before the affair became public.
National did not make any political capital out of the perceived tardiness of the Ministry of Foreign Affairs and Trade in reacting to the tainted milk scandal.
But domestic politics is different.
Unlike 1990, Clark had been presented with a golden opportunity to make public capital from the crisis and had no intention of putting any glory her opponents' way by announcing a bipartisan solution to avert a potential domestic banking crisis.
But judging by the carefully chosen words used by the Reserve Bank's communications team to a string of questions I sent yesterday, it would appear Governor Alan Bollard wanted to at least apprise Key ahead of the announcement.
Asked whether the bank recommended briefing Key first, it replied: No comment, we don't reveal policy advice to the minister. Could Key expect to be briefed on any further announcements? You need to put this question to the Government as the action has been taken under the Public Finance Act.
In official semaphore: Yes and No.
What's more problematic is the inference that the Government might have ruled against central bank advice suggesting finance companies and Kiwibank should pay a guarantee fee like the Australian-owned trading banks, but opted not to impose undue costs on the smaller players.
Around the banking community there is real angst that the trading banks will have to fork up $30 million to $40 million each within the next 14 days for their depositor guarantees while their smaller rivals get a free ride.
The upshot is that if a finance company does have to be bailed out farther down the track, the $100 million-plus the Government has extracted from the Australian banks will more than cover it.
Then there is the issue of the Government favouring its own bank, Kiwibank, by establishing the threshold for a free guarantee at $5 billion of assets, which is marginally over the $4.8 billion in assets the Government-owned bank held at June 30.
These are all issues which will still be on the table after the election irrespective of which party wins.
The more immediate issue is the coming credit lines crunch as overseas funding to the major New Zealand-domiciled banks contracts. The Reserve Bank says it is comfortable with the Government's decision not to guarantee interbank lending as Australia has. National is not comfortable.
In reality, the Government intends to piggyback on the guarantee the Australian Government has given its banks on interbank loans, hoping the cash will flow through to their New Zealand subsidiary branches ...
These are debatable tactics, particularly given the international focus now on New Zealand, including BusinessWeek's singling this country out as one of 13 nations "at risk."
"Like Iceland, New Zealand was a favorite of investors playing the yen carry trade. And like Iceland, New Zealand is hurting. After rising sharply last year, the Kiwi dollar has dropped 28 per cent from its March high. The economy is already in recession, having contracted the past two quarters, and Standard & Poor's expects more pain to come.
"Unlike Iceland, though, New Zealand's banks have strong support because most of them are controlled by bigger banks ... in Australia. The New Zealand Government also is in a stronger position than Iceland's, having run budget surpluses of around 4 per cent of GDP until recently. Even with the country in recession, the Government is likely to continue running a budget surplus, albeit a tiny 0.5 per cent of GDP."
Given such a verdict, this is not the time to be playing politics with Australia, on which country we may become increasingly reliant.
It is the time for grown-up behaviour.
Key is right to insist he is included from now on.