Have we seen the end of Mr Nice Guy? The number of voters who say they'd like to have a beer or bbq with John Key might soon plummet, as the Government appears to be getting into the hard decisions early in its second term. According to John Armstrong, 'National seems unaware of how hard-edged it is starting to look with its noticeable drift to the right. The contrast with the soft pragmatism of its first term is starting to become pronounced'. In his column, Ministers risk seeming uncaring as jobs culled, Armstrong writes that public sector reform looks likely to start having a real impact on frontline services - despite Government promises - particularly with possible layoffs of nursing staff at district health boards. He warns that the Government is still to reveal the extent of contracting out of public services to the private sector, and says it may have a hard job selling that to voters. Tracy Watkins agrees and says even though changes to date have been done far more carefully than in the 1990s, real savings - particularly in the big budget health sector - will mean job losses in the thousands.

Labour's deputy leader - and ex-Mfat staffer - Grant Robertson also pushes these points in a Red Alert blog post, MFAT- Privatisation and the end of diplomacy. Robertson lays it on fairly thick, suggesting that the Mfat restructuring is essentially 'a large exercise in privatisation' and saying that 'a pretty much unfettered free market model is to be unleashed at MFAT'. He concludes that 'This second term National government is going to make the 90s restructuring look like child's play'. Robertson could be right of course, but Labour and the opponents of restructuring need to remember the fable of the 'Boy who cried wolf'.

Today's announcement of welfare changes will no doubt play well to National's core audience but these changes won't help the immediate return to surplus, as they will actually incur additional costs in the short term. What won't go down well with National's core support - particularly amongst small to medium sized business owners - is the possibility of a significant rise in workplace insurance levies.

This is on the cards if, as Danya Levy reports, the Government decides to remove ACC from covering work injuries. Levy also reports that ACC could be corporatised, turning it into a SOE that pays taxes and dividends - which would be a radical and significant reform. All these possibilities would be fraught with danger for the Government.


Those wanting to retain ACC as the sole public provider of work injury cover point out that not only would premiums increase, or entitlements would be reduced, but that the profits would overwhelmingly go to Australian-owned private insurance companies.

The biggest problem that opposition parties may face is choosing which stick to start beating the Government with.

In the meantime the partial privatisation policy is still providing the opposition parties with plenty of ammunition according to the NBR's Michael Coote who describes the management of the process as going 'from disastrous to catastrophic by the week'. He says the Section 9 controversy could allow Maori corporate interests to hamstring the partially privatised companies for years to come. He also points to the Declaration on the Rights of Indigenous Peoples, which could provide another avenue for Maori to enforce Treaty rights and leverage special treatment in the allocation of shares.

The Government is still keeping at arms length from the Ports of Auckland dispute, which is getting increasingly bitter and entrenched. CEO Tony Gibson is openly attacking the union, with allegations of vandalism and threats to sue them over alleged blacklisting. The ability to prevent foreign ships docking at the port has always been the key weapon of the wharfies, and that's why the Maritime Union is confident of their ability to win this industrial dispute - international solidarity with the workers will be much stronger than the muscle of the bosses. This is why the Ports of Auckland will be very keen to sue if it can be proven that the Maritime Union actively organised such economic sanctions against shipping companies or the port.

New Zealand's industrial relations look set for the most turbulent period in some years. This is especially the case with the news that over 700 Affco workers are facing an indefinite lockout on Wednesday, and 1500 caregivers and nurses in rest homes are about to go on strike.

Affco is owned by the Talleys Group, which has a record of being very confrontational with unions. Green Party industrial relations spokesperson Denise Roche says that Affco 'could not be trusted to negotiate a collective contract in good faith'. As with the ports dispute, the Affco issue seems to be less about money and pay and more about security of work and casualisation.

David Shearer's leadership style is again under scrutiny as his attempt to reinforce his 'non-politician' status comes up against the expectation that as Leader of the Opposition he will publicly hold the Government to account. Shearer's response is 'You don't wear your guns on the outside'. Apart from revealing that Shearer once voted National, the interview reveals little about the new leader, but that's interesting in itself.

Tracy Watkins reports that Shearer has been preparing a series of speeches setting out his vision for the country but wants to distance himself from the adversarial politics of the past.

However, Shearer has taken a clear stand on the Crafar farms and asset sales issues and continues to attack the Government over them. But Danyl Mclauchlan at The Dim-Post wonders why Shearer doesn't take the public lead from ex-leader Phil Goff on issues like Mfat restructuring.

For those interested in issues of inequality (and the environment), the must-read item for the day is Brian Leyland's The only way is full steam ahead. Leyland makes the case for the necessity of both economic growth and technological innovation in order improve not just the interest of society as a whole, but to reduce inequality and protect the environment.

The other important items of the day are: Steve Braunias' very funny Secret Diary Of Murray McCully, Bernard Hickey's Power of printing money, Sarah Harvey and Imogen Neale's Parents prop up schools to tune of $250m, Derek Cheng's Strip Graham of knighthood: victim, Charles Anderson's How the mighty fall from grace, and John Armstrong's Weakened watchdog makes democracy weaker.