John Key's dramatic Cabinet reshuffle displays a streak of ruthlessness hitherto rarely seen in a New Zealand prime minister.

Usually prime ministers rely on attrition through pending ministerial retirements to create the vacancies necessary to refresh their Cabinet line-ups. Competence rarely if ever sees ministers being axed completely from the Cabinet. Ministers are simply reassigned to other portfolios where they can do less damage.

When he revealed last week that the problem-afflicted Hekia Parata would be remaining in the education portfolio, it seemed Key would conform to this ethic. It had to be assumed the reshuffle necessitated by David Carter taking up the post of Speaker following Lockwood Smith's appointment as New Zealand High Commissioner to London would be minimal.

Not so. Key has provided further demonstration of his more "chairman of the board" style of political management compared to the hands-on control exercised by his predecessor Helen Clark.

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Key has displayed all the sentiment of a corporate restructurer. So ministers are given the chance to perform. If they do not they are out. Simple as that.

That is the fate of Kate Wilkinson and Phil Heatley who were told by Key they had made a "great contribution" but were being dumped from the Cabinet.

It is hard to argue with his logic. The two junior ministers can have few gripes. Wilkinson had already dropped her Labour portfolio following the Royal Commission's report into the Pike River coal mine tragedy. She was invisible in her remaining Conservation and Food Safety portfolios.

As Housing minster, Heatley was slow to appreciate the political significance of the crisis in the increasing unaffordability of homes for larger and larger sections of the populace.

As Key says, both ministers had four years to leave a legacy in policy terms or otherwise make an impression.

Heatley can well argue that nothing went fundamentally wrong in his time in the housing portfolio bar one thing - the mess surrounding the closure of Housing New Zealand branch offices and the introduction of an 0800 referral number for state house tenants.

The latter, however, pales into relative insignificance given the multitude of problems in education last year.

Both ministers could justifiably ask why they have been axed and Parata has not.

The answer is that Key still has confidence in Parata being able to do her job. She has been education minister for little over a year against Heatley's and Wilkinson's four years as ministers.

Like Parata, Wilkinson was once touted as a potential high-flyer. The difference is Parata's rapid rise is down to Key. He has a lot more political capital invested in her succeeding.

Even so, he has promoted Auckland Central MP Nikki Kaye to buttress Parata and provide an untainted means of communicating what National sees as big political positives of the party's education policies.

The sackings largely overshadowed Nick Smith's expected return to the Cabinet after 10 months of penance on the backbenches. His appointment to the Housing and Conservation portfolios is admission National is playing catch-up in both those areas.

To some small degree, the sackings are also a concession to the large number of MPs on National's backbenches. That group must be given hope that promotion is a possibility.

Ambition must be satisfied. Otherwise there is a risk of frustration turning to dissension - especially if the polls turn against National in coming months.

Above all, what the reshuffle does is put the entire Cabinet on notice. National largely got away with last year's catalogue of blunders and unwanted distractions without too much damage to its support in opinion polls.

National cannot be complacent that its good luck in that regard will continue. What the reshuffle really tells you is that Key is very well aware that the margin between holding and not holding power after next year's election is extremely tight. There is simply no room for indulgence.