The unfavourable ratio of damaging episodes to achievements strongly suggests National is now suffering from third-term blues, or "third-termitis". This affliction is normally taken to mean that a government has become stale, arrogant and prone to errors.
The Government's critics rightly ask where the fresh ideas are, or whether the Government has any vision left. The best Key has been able to offer is his flag-change project.
Obviously designed to provide a legacy for Key, the referendum is widely seen as a vanity project. It lacks popular support and is shaping up to be an embarrassing failure.
Previously Key has been adept at reading the mood of the public, but he is uncharacteristically out of sync on this, which suggests the administration has tipped into hubris. The astonishingly inept Northland byelection campaign was also the product of a seemingly tone-deaf administration and leader.
The Government's woeful reading of the global refugee crisis this week is the latest indication that Key is out of step with quickly changing public sentiment. Everyone else sees the need to respond to tragedy. Key looks cold-hearted and backward.
The Government's lack of dynamism has been most visible on housing affordability. National's response has been "too little, too late", and some of its intervention has been flawed or farcical.
Parallels can be drawn with Helen Clark's third term. This 2005-2008 era became characterised by similar sagas that eroded the public's trust and respect for what had been seen as a highly competent administration and leader. The Clark Government spent the first year of its third term on the back foot, defending some controversial matters from the election campaign.
Likewise, National has had to continue fighting residual Dirty Politics problems. Its first few months back in office were badly damaged by the independent report confirming the Prime Minister's Office and the SIS had abused their power in supplying information to Cameron Slater. Then Key was caught in embarrassing denials, and admissions, that he was in contact with the blogger.
There are also parallels with the last National Government, which became riven with instability. Notably, in 1999 Murray McCully was embroiled in a scandal over payments that the Auditor General deemed "unlawful", leading to his resignation.
The Saudi sheep scandal appears to be another scandal with the potential for a similar outcome. Audaciously, Key has tried to blame Labour for this problem.
Increasingly there is an acknowledgement of National's "succession problem". Key remains popular, but the lack of replacement options indicates another weakness.
Bill English is in the twilight of his career, Steven Joyce is technocratic and uncharismatic, Paula Bennett is seen as a lightweight and junior ministers are too inexperienced.
As is often the case with long-term governments dominated by a single figure, no new talent can prosper. It's only once back in opposition that the party can truly see who is capable of rising to the top.
Astonishing success
A glance at any opinion poll indicates National's extraordinary popularity. For example, the latest Herald-Digipoll puts National on 51 per cent support, and Key on 64 per cent.
Not only has the Government not dropped in support since its re-election, it is just as popular as when it first romped to power in 2008. In fact, the public's so-called honeymoon with Key - which began in late 2006 - has lasted an astonishing nine years. Clearly, Key has the potential to go down in history as New Zealand's most successful prime minister.
Such popularity is all the more remarkable given the context of scandals and gaffes that have hounded National over the past 12 months.
Key's Teflon coating is obviously thick and it appears to be self-replenishing: he gets a scratch on the surface and the damage fades away.
Clearly the scandals are of little interest to most voters. Key has made his mantra "it's the issues that matter" which determine how New Zealanders vote. Since the Global Financial Crisis, voters have been focused on economic-related issues and the traditional concerns of education and health.
Therefore, as at last year's election, the central role of the economy is the main factor in National's success. National continues to be perceived as a cautious and competent manager in difficult and uncertain times. This year's Budget simply reinforced that image.
National's pragmatic and clever manoeuvring is also a big factor in its success. The party has been careful not to stray too far from the views of middle New Zealand. Part of this is simply down to the dominance of pragmatists in Cabinet and caucus.
Key's most influential supporters - English, Joyce, McCully and Bennett - are hardly neoliberal ideologues.
This doesn't mean National hasn't veered down the path of radicalism occasionally - most prominently in state-housing sell-offs and the social investment bond exercise. But such initiatives have been exceptions.
And Key's instincts are to pull back from the extremes. When Labour has started to get traction on an issue, National has found ways to deftly shift positions. This normally involves adopting moderate policies, often adapted or stolen from opposition parties.
On key issues such as inequality and child poverty, National has sought to assuage worries with increases in benefit rates. Similar moves have been made to deal with growing concerns about capital gains taxes, foreign house buyers, and poor-quality rental properties. Much of this might be tinkering but it sends a strong message that the Government has listened.
National's political flexibility betrays a relatively policy-free and principle-free government. This suits our anti-ideological era, in which voters don't particularly expect vision or philosophical principle from political leaders.
A third reason National has been able to withstand scandal and embarrassment is it has already accumulated substantial political capital. Key has previously impressed the public with his Government's management of serious problems - most notably the GFC, the Christchurch earthquake and the Pike River disaster. Competent political management in these areas has produced a reservoir of goodwill.
National therefore has the benefit of the doubt. The public has been ready to forgive or ignore any missteps. Even the ponytail embarrassment, which was viewed negatively by National supporters, could be forgiven. When a politician is largely trusted, as Key is, his failings will be discounted by voters.
In contrast with the Clark Government's third-term, when Labour tended to dig its heels in rather than apologise or reverse from an unpopular direction, Key is more ready to U-turn or admit mistakes.
In general, Key appears to be aware of the need to combat third-termitis. His attempt to rejuvenate the party while in power has been unequalled.
Today's Cabinet of 20 contains only 11 ministers who have been there since the start. Even more starkly, five of the six ministers outside Cabinet are new. And the wider caucus has been refreshed. More than a quarter of the caucus are new MPs elected last year. A large proportion of the MPs are under 45 and, although still rather "male and pale", the diversity of National is expanding under Key's watch.
Outside Parliament, too, the party's finances and membership numbers are apparently strong. The -party is therefore in good health to fight a successful election campaign.
Can National win a fourth term?
Which trend - third-termitis or clever and pragmatic manoeuverability - will prevail over the next two years?
There is no doubt National will continue to play a highly pragmatic game, leaving the Opposition little room to differentiate itself.
If National needs to "borrow" policy from Labour again, it will. Key will ensure that in
2017 there are few significant policy reasons to vote for Labour.
The economy will play a big part, too. So far, National has had luck on it side, but that might be running out, with looming global problems and domestic challenges. It might now be difficult for National to come up with any fresh ideas to deal with those problems.
MMP means a big factor in National's re-election will be its ability to attract coalition partners. Act's one MP will be locked in, but Peter Dunne will be less certain, and the Maori Party might well be more independently minded at the next election. Colin Craig's Conservatives will not be a factor and much of its 4 per cent party vote will end up with National. And ultimately, Winston Peters will loom large in National's plans.
A bigger threat to National will be from itself. New Zealanders vote out governments rather than vote in oppositions. There will be plenty of opportunity for National to shoot itself in the foot over the next two years.
Just because recent gaffes and scandals haven't affected National's popularity, doesn't mean future ones won't. Recent controversies have been deemed too complex or unimportant. But the health and safety debacle over worm farms also indicates that small mistakes can capture the public's imagination and incite ridicule.
Key's ability to keep his government united will also help determine whether third-termitis takes hold. Ministerial rivalries, especially for the top job, among backbenchers wanting to advance can be de-stabilising. Add in the potential for infighting from renegade MPs and there's the potential for National to lose its valuable image of unity and competence.
Ambition will be a powerful driver in keeping the Government on the popular path. Obtaining a fourth term is the Holy Grail for National and it's within its grasp - the iPredict website of political betting, lists National's chances as being 62 per cent.
Such an achievement would push Key ahead of Keith Holyoake's record of 12 years as Prime Minister, making him the longest-serving PM since Richard Seddon, who served from 1893 to 1906.
And after that, a fifth term is distinctly possible. That would have Key even beating Seddon's 13 years at the top, making him New Zealand's longest-serving PM.
Damage ratings (out of 10)
Plus
• SIS official report: 7/10
• Saudi sheep scandal: 7/10
Benefit ratings (out of 10)
