Key Points:

To borrow the immortal words of Australian politician Bill Hayden, some might argue National could have put up the proverbial drover's dog as leader and still won last month's election such was its huge lead in the polls over preceding months.

Maybe so. However, the history books should record the 2008 election result as a personal triumph for John Key. Hayden's sour grapes remark was directed at Bob Hawke who snaffled the leadership of the Australian Labour Party off him just hours before the Liberals called an election they were bound to lose. In contrast, Key was leader for two years before a victory the scale of which is disguised by the proportional voting system.

Had the election been fought under the pre-1996 first-past-the post system, the outcome would have been of the landslide proportions of Sir Robert Muldoon's stunning victory in 1975 and Jim Bolger's similar rout of Labour in 1990.

That achievement alone elevates John Key into a select group of National Party leaders. There can be no other choice for Politician of the Year. Winning elections is what it is all about. But Key has reinforced his claim to the title through the ease and confidence with which he has taken on the mantle of Prime Minister. His opponents and critics had predicted he would falter as Leader of the Opposition, wilt under the pressures of an election campaign, and fail as Prime Minister simply through lack of experience. Wrong, wrong and almost certainly wrong again.

Labour made leadership a major election issue, if not the issue.

That theme played heavily in Labour's advertising which promoted a white-jacketed Helen Clark - the white designed to express renewal and freshness - and painted Key as some confused and inconsistent klutz.

Instead, Key radiated more confidence as the campaign progressed. He put the supposedly "unloseable" election completely beyond Labour's grasp.

The speed in forming the new Government and the pace since in implementing parts of National's 100-day action plan indicate a Prime Minister who knows what he wants to do - and, just as importantly, what he doesn't. That wasn't clear before the election. It is clearer now.

He will be decisive. But that decisiveness may not be utterly consistent. What matters to Key is whether something works or not - and not whether it is consistent with some long-time National Party shibboleth.

What also matters is that Key speaks for a new generation which entered Parliament in force at last month's election - a generation which is less hidebound by ideology or consumed with refighting the battles of the 1980s or the 1990s.

This is a generational shift in politics. The baby-boomers are on their way out. Winston Peters has gone. Clark and Michael Cullen are poised to check out.

The new generation has never experienced a wage-price freeze, fixed exchange rates, Think Big or farmers being subsidised according to the number of sheep they had on their farms.

The new generation has only a hazy memory of the Labour Government which swept all that away in a revolution of reform before imploding. Seeing him in Parliament, those younger MPs must view Sir Roger Douglas as a relic from another age.

Key's advantage is that his age and political freshness places him at the vanguard of the new generation - something that cannot be said for the new Labour leadership.

Phil Goff is another classic baby-boomer. However, for all his vast experience and all-round skills, he needs to reinvent himself. He is too one-dimensional. He is going to have to stop lecturing and start inspiring. He has to convince people he is more than a stop-gap leader, and do so before the Shane Jones' and David Cunliffes of this world or whomever rises to the top of Labour's new intake get interested in things beyond the confines of their shadow portfolios.

Peter Dunne is another baby-boomer who nearly got the chop. His ditching of Labour and swinging United Future's support behind a National-led Government in the middle of the election campaign was the cleverest political move of the year, if not the most edifying one.

He got to keep his ministerial job - and quite likely saved losing his Ohariu seat as National voters could safely vote for him knowing he would back their party to form the next Government. But Fortress Dunne is no longer impregnable. The seat could fall to Labour next time.

The other smart moves this year came from Key, the first in ruling out Sir Roger for any ministerial post in his Government.

Key has been given a strong mandate. But it is more a mandate for not changing things. It is certainly not a mandate for the kind of tax cuts, privatisation of government services and cost-cutting across the public sector that Sir Roger espouses.

Key may allow Act to do things around the fringes, but there is no way he is going to let Rodney Hide and Sir Roger dictate the Government's direction. Sir Roger is partially responsible for the destruction of one government. Key was not going to risk it happening a second time.

National's sheer strength of numbers meant Hide had to accept this decision. Act had nowhere else to go bar another three years on the Opposition benches.

Far more courageous was Key's refusal to work with Winston Peters. It could have backfired. However, Key felt he was left no option after Peters' appalling performance over Owen Glenn and donations to NZ First.

Key wanted his administration to be a clean break from the past. Having Peters on board would have tainted it from the beginning - as well as possibly harbouring the seed of its destruction.

As for Peters, his career is material for some kind of Shakespearean tragedy or the psychologist's couch - or both. Three times a minister; three times sacked by the Prime Minister. He might have been Prime Minister himself had he kept his head down and stuck with National, particularly when Jim Bolger's leadership was under question after Ruth Richardson's cataclysmic 1991 Budget.

Maybe some fatal flaw lies dormant in his character, activating itself only when he is on the verge of being regarded as a conventional politician. You can take an MP out of opposition, but you can never take the opposition out of Peters.

What we can be sure about is that Peters, having used the media to boost his career early on, grew to despise it. His version always had to be the correct one. That he could never concede to being wrong was what destroyed him - not the bunkum that he was the target of some kind of big business-establishment-media collusion.

NZ First, a party built solely around a personality cult, will not be back.

Peters will be missed. The charming, generous, understanding Peters, that is. Not the cantankerous, argumentative, frustrating and difficult creature with whom other parties were forced to do business, smiling benignly as they did so but at the same time looking about as comfortable as someone lying on a bed of sharpened nails.

This is the final politics page for 2008. The page will resume on January 17 when politicians return from their holidays.