KEY POINTS:
John Key demonstrated all the attributes of a big-time international currency trader as he drew Helen Clark on to his ground this week, then closed out his calculated punt leaving her the public loser.
Key's first state-of-the-nation address as National's leader was not a remarkable one.
It was
devoid of any substantive content.
No brilliant policy prescriptions on offer to deal with, let alone get rid of the problems caused by New Zealand's underclass.
What the speech did demonstrate in spades is that Clark will have to be much more cunning than she has to date if she is to keep her new challenger at bay.
Clark's first mistake was to react to the Key speech even before he had given it. Once the stories appeared spelling out that the underclass would be Key's focus, Labour's press releases started rolling.
There was no real problem. Unemployment had come down under Labour. More people were in houses. Crime rates were falling. National should look to its own record.
The underclass had been created by National when he slashed benefits on taking office in 1990.
Get lost, Noddy.
What Clark and her colleagues did by jumping too quickly was to create a perception among those who are part of the underclass that Labour does not share their pain. But the state-house boy turned millionaire turned politician might.
When Clark refused Key's invitations to tour the mean streets of Auckland, the perception of a non-caring Prime Minister was simply cemented further.
Game one to Key without even having to put up any money.
But the political battleground is not the underclass.
It is middle New Zealand that fears to walk alone on city nights, and worries that the underclass is simply the spawning ground for rapists and murderers.
And that a Wellington bureaucracy too fat with well-paid policy analysts and not enough front-line staff is too PC in its thinking to realise that dangerous criminals should stayed locked up to preserve public safety.
Game two, which Key also won, was to spell out that such criminals would not be paroled when National gets into power and that the scandal-plagued Corrections Department will be brought under control.
Key's decision to up the political ante in this way is informed by skills he acquired as a currency trader. How to calculate risk. How to assess probabilities. How to bring your opponent on to your ground before they realise they are about to be suckered.
Clark is a quick learner. But she was dealt to this time. She has not had to deal with theatrics of this height before. It's debatable whether her team, softened by seven years in power, sufficiently shares her own ruthlessness in dealing with opponents. But learn she will have to.
Key, like former leader Don Brash before him, had built a media constituency for his message through a series of controlled leaks. The essential political strategy that Key was intent on was brought home to me in a wander through National's third-floor offices 10 days ago.
I asked Key's new chief press secretary, Kevin Taylor, for an outline of what topics Key would focus on, and to organise a phone call with National's leader to take place after the Gisborne caucus meeting.
Taylor's reply was an eye-opener.
National would play the usual cat-and-mouse game with news reporters by not giving them the full details of what was coming up. But there would be sufficient to get the headlines. At the same time, commentators would be fed a bit more of National's thinking to inform their columns.
But this business-as-usual approach will not last for long. Journalists worth their salt will soon tire of frank manipulation.
Veterans such as Herald columnist John Armstrong quickly demonstrated they were not fooled, pointing out that the speech lacked the impact of Brash's Orewa trilogy.
The Key speech seems more designed as a slow-burner, a device to tease out the opponent rather than a full-on statement of intent.
It's all about perception at this point.
Clark is now alert to the mistake she made by saying the underclass was diminishing because of the extraordinary success in getting people back to work.
She will need to ensure she thinks through future ripostes and couches them more from the point of view of the public and those suffering the pain rather than her tick-box of Government achievements.
Headlines about the murder of the Kahui twins, the picture of a police force incapable of dealing with the families' trenchant refusal to disclose which of their number killed the babies, create a problem for Labour among its softer support base.
Next time around Clark would be better off not to react but rather to start playing on ground of her own choosing.
