Political editor Audrey Young looks back at the five biggest moments of John Key's third term, which began a year ago, how he could have managed them differently and the challenges that lie ahead in the next year.

5 big moments in the past year

November 5: Joining the fight against Isis

Despite remaining noncommittal and coy during the election campaign about joining the battle against Isis, John Key delivered his first formal national security speech nine weeks later in which he indicated the Cabinet might commit New Zealand troops to a training mission in Iraq with Australia.

The decisions were announced in detail on February 24, the day Key got so worked up about Labour's opposition to sending trainers that he yelled across the House to Labour leader Andrew Little to "get some guts and join the right side".


Key could have said during the election campaign in September that National was open to joining the fight instead of explicitly stating New Zealand was offering only moral support to US military action against Isis. Either he genuinely couldn't anticipate New Zealand making a contribution or he was being misleading.

Once the Cabinet made the decision in principle the process was managed carefully from the November speech to the actual two-year deployment.

A vote in Parliament was not required for the deployment but the fact that it would not secure a majority if it were put to the vote now should be a worry to the Government (although the latest Herald-DigiPoll survey showed 59.3 per cent support the deployment against 34.5 per cent who don't).

March 28: Northland byelection

Key breached the discipline he had imposed on his own Government at the outset of the third term - any signs of arrogance or complacency were banned - when he declared that New Zealand First leader Winston Peters didn't have a dog's show of winning the byelection in Northland, a seat National held by 9300. Peters won it by 4441 and Key tasted defeat. The win gave the Opposition an extra MP (Peters moved off the list to the electorate and the next one on NZ First's list went on) but its significance goes well beyond that. It has set up New Zealand First to campaign as a party for the "neglected regions".

Prime Minister John Key says there is 'no way we will be having a job sharing agreement' with New Zealand First.

April 24: Ponytail pulling

Key was en route to represent New Zealand at one of the most sombre occasions imaginable - Anzac centennial commemorations - when the most unimaginable embarrassment unfolded: the PM's predilection for ponytail pulling.

Apart from not engaging in the behaviour in the first place, Key handled the excruciating situation as well as could be expected (who would have expected?) but he could do nothing to rescue the country from its excruciating embarrassment.


The only positive is that it pales somewhat against the tales of obscene student antics being levelled against British Prime Minister David Cameron, although they may well be porkies.

May 21: The Budget

John Key says there are always endless challenges in Government.

Strictly speaking it was Bill English's Budget but the "compassionate conservatism" within it, as Key labelled it, delivered on his post-election promise to address child poverty.

The real increase in social welfare benefits for the first time since the 1991 cuts was the deep, dark secret of the Budget and widely welcomed.

It also took a raft of measures to address the overheated Auckland housing markets including a capital gains tax on investment property held for less than two years, a means by which to count overseas buyers, and a scheme to open up excess Crown land in Auckland.

The trouble for the Government was that it looked late to the party and only after the Reserve Bank had cried crisis. For years the Government denied there was a crisis in the Auckland housing market and refused to establish a register to measure the extent of the problem, until the moves in the Budget which amount to one.

The much vaunted return to surplus in the 2014-15 year became less of a certainty. We will know when the final accounts are presented in mid-October.

September 1: Flag referendum

John Key comments on the New Zealand flag debate.

Key has had little thanks for delivering on his promised flag referendum. The Flag Consideration Committee released the four finalists to much debate about two that had missed out: the silver fern on black and Red Peak. Given that Labour and the Greens' policy is to support a review of the flag, Key could have expected indifference rather than hostility.

If he were to do it again - and you can be sure he won't - he should have a smaller committee including some professional designers, and at least six months for them to whittle down a long list of 40 to four.

In terms of the two-step referendum, that should remain because, as officials advised, it was the process with the least inherent bias towards either the current flag or an alternative.

5 challenges in year ahead


The Trans Pacific Partnership deal is almost certain to be done and dusted in the next few weeks when chief negotiators and then Trade Ministers of the 12 countries meet in Atlanta, in the United States.

Then the big sell will begin on a deal which is bound to disappoint every dairy farmer. Opponents of the deal have had a five-year head start on the Government. Malcolm Turnbull's claim that Key has the gift of being able to take the people with him will be tested.

The economy

A slump in dairy prices and the slowdown in China and Australia's economies are taking their toll on confidence and forecast growth rates. The good news for home owners and exporters is that interest rates and the Kiwi dollar don't look like heading north.

Key remains upbeat because that is his job and his nature but the next set of forecasts from the Treasury, in three months' time, will be sober reading.

Spy laws

Major reforms to the two spy agencies, the SIS and the GCSB, and perhaps even a merger, are expected to be recommended in the review being led by Sir Michael Cullen.

The biggest challenge will be to get Labour on side. It is one of those reforms that needs bipartisan support before being taken to the public. Key's best move in his Cabinet-making this term was to give Attorney-General Chris Finlayson responsibility for the agencies.

Social policy

The role of the private sector v the role of the state in such areas as prison management, social housing and intervention in the lives of families is an increasing debating point as National increases private sector involvement.

Bill English is captaining the expansion of the "social investment" approach in social service delivery, in which money is spent only where it makes a difference, but Key will have to become its champion too.

Troops in Iraq

The prospect of the conflict in Iraq getting out of hand would present a major challenge to the Government. Australia's deployment is open-ended. Key has pledged that New Zealand's is a two-year deployment.

But would New Zealanders coming home in body bags mean getting out of the Middle East or increasing New Zealand's effort? Possibly the latter.

PM basks in helping the 'less well-off'

Prime Minister John Key says the highlight of the year since the 2014 election was the Budget in May.

"I felt pretty strongly that we should be doing something to help the less well-off and we are the first Government in 43 years to raise benefits," he said yesterday at his post-Cabinet press conference.

"And for a centre-right Government to do that, I think history will mark us quite kindly for that."

As for the challenges that lay ahead, he cited Isis. "I personally worry about what is happening with Isil, what's happening in the Middle East."

Some of the Syrian crisis of recent times could be traced back to President Bashar al-Assad but also a fair bit to Isis.

"You've got a very delicate situation there in the Middle East and you can never be 100 per cent sure how that is all going to play out."

New Zealand has about 105 Defence Force personnel based at Camp Taji just north of Baghdad, and another 40 support staff at bases in the region.

Addressing New Zealand's contribution to Iraq was one of the first issues of Mr Key's third-term Government. The election was held on September 20 last year.