John Key's bombshell announcement yesterday has thrown New Zealand politics into turmoil. While he was at the helm of the National Party, it was beyond reasonable doubt that a fourth term in power was easily within reach of Key's party.

But his astonishing decision to step down as prime minister makes that expectation a lot less certain.

Key said he would back Bill English for the job, and that may be enough to secure caucus support for his deputy.

But others - Steven Joyce, Judith Collins, Paula Bennett - might fancy their chances too.

Advertisement

The point is that the unforeseen departure of Key in the prime of his premiership has created a leadership vacuum on the centre-right and will have given Labour renewed hope that they are not dead in the water, especially on the back of the party's strong showing in Mt Roskill at the weekend.

Explaining his decision yesterday, Key said it was the right time for him to take a step back in his career and spend more time at home. He and his wife Bronagh, he said, had spent a lot of time apart, and there was no way he could have stayed in the job for an entire fourth term. By going now, Key has given his successor 10 months or so to put their stamp on the Government, which is a decent interval.

The country's 38th Prime Minister, Key won office in 2008 and has held it untroubled every since. He has grown comfortable in the job, and shown an increasingly deft hand in managing domestic and global shocks.

National inherited from Labour an economy in reasonable shape. The policy response from Key and English during the global financial crisis largely insulated the domestic economy from the ravages which inflicted damage in Europe, Asia and North America.

The economy remains in good shape, with the property sector the main area of uncertainty.

In terms of national leadership, Key can take credit for his handling of three unexpected crises. He was on the ground swiftly after the Canterbury earthquakes, the Pike River disaster and the Kaikoura shake, offering comfort to distressed communities and assuring frightened and sometimes grieving families that they were not alone.

In a small country, these intimate gestures were important and comforting. It was a measure of his easy-going style that Key - the wealthiest politician ever to occupy the 9th floor and a golfing buddy of Barack Obama - could mix comfortably with Kiwis from all walks of life.

Key cited the defeat of the flag referendum, failing to ratify the Trans Pacific Partnership and not getting the Kermadec Ocean Sanctuary opened as the main regrets of his career.

Advertisement

These sound like issues which sprang to mind, rather than matters to which he had given much thought. Had he reflected further, he might have expressed regret that opportunities for those at the bottom appear to be limited, and that the housing market has soared beyond the reach of so many ordinary people.

Addressing these issues is no longer Key's responsibility, but they cannot be ignored. The next leader will plenty on their plate.