The 2012 political circus is up and running

TRACY WATKINS

OPINION: The Beehive cafe might still have the sleepy air of a seaside resort in the middle of winter, but politicians are jockeying to shed any perception they are wringing out the final dregs of the traditional January break.

Labour leader David Shearer donned his gumboots to speak out against the contentious Crafar farms deal, Cabinet ministers suited up for their first meeting, John Key delivered his first major economic speech of the year and Winston Peters slipped comfortably back into his old skin. Seeing those familiar florid press releases drop into your inbox it was like he had never been away.

Lobbed into the midst of all that was the leaked teapot tape - the so-called "game changer" on the 2011 campaign trail - that turned out to be a fizzer. There might be a certain public fascination with hearing the prime minister's uncut thoughts on the election, but teapot-gate was no Watergate. Which only raises questions of judgment again. If the conversation was so innocuous, why did Mr Key seem so hellbent on ramping up the story last November by walking out of a press conference? Why refuse to allow its release? If he had done things differently, could the holy grail of an outright majority been his?

The votes are in now so it may no longer matter. But Mr Key's biggest blunder may have been to call in the police, which guarantees to keep the story going. Police have deployed considerable resources swooping on media organisations to execute search warrants over a tape of a conversation that none of them has published and which has now been revealed as nothing more than chit chat. Charging anyone with criminal behaviour - as police have repeatedly threatened to do - would look farcical. Even more farcical would be the sight of the prime minister in the dock as a witness explaining why he failed to notice the microphone under his nose. If the prosecution don't call him, the defence surely will.

But that is in the future. For now, the tape is so benign Mr Key and his ministers might be secretly cursing the fact that the groups who unleashed it on the internet - presumably anti-government types - didn't wait a day. The D-day for a decision on the Crafar farms had been burning a hole in the Government's diary for months and anticipated with about as much relish as a date with a dentist who extracts teeth without anaesthetic. A distraction in the form of another round of John Key versus the media over the teapot tape would have suited the Government nicely.

Releasing the Crafar farms' decision in January smacks of a canny move on the Government's part. A Friday afternoon in the the middle of summer, heading into a long weekend in Auckland, and only a couple of months after a low-turnout election is the next best thing to a Christmas Eve dump for clearing the decks of unpopular decisions. The one spoiler from the Government's point of view is the punters might be feeling grumpy early this year because of the weather.

The Government will argue the timing was hostage to the Overseas Investment Office and the receivers' deadline of January 31. That's a line only the proverbial monkey's uncle would swallow.

Mr Key and his ministers have a mountain to climb convincing voters that the deal is not a precursor to the wholesale flogging off of productive farmland to Chinese investors with deep pockets. The defence that 650,000ha of land was flogged off to overseas buyers under Labour is hardly a winning one and the Government must know that. That's just a "the horse has bolted" argument. But if National hopes to tidy away any fallout by dealing with the issue before Parliament resumes on February 7, its polling would also have told it that this is a vain hope.

On the campaign trail, Mr Key tapped into the deep vein of anti-foreign ownership sentiment when he said he did not want to see Kiwis become "tenants in their own land". His words are now being thrown back at him. Changes to the Overseas Investment Act in the wake of those comments were little more than tinkering.

The Chinese offer on the Crafar farms is widely viewed as having set a new benchmark on price. Even rich lister Sir Michael Fay couldn't match the Chinese bid.

What hope that Kiwis buyers will be able to compete on price in the future?

For Labour, stoking up opposition to the sale is an opportunity to set the agenda at the start of the political year. Mr Shearer's challenge is finding a way to talk over the top of Mr Peters on the issue.

Labour suffers from the disadvantage of having to be reasonable - the jingoistic NZ First leader has no such constraints. He has crusaded against foreign ownership since year dot, even from the lofty heights of foreign minister, and is also blatant about playing the anti-Asian card. He will say what Mr Shearer won't because he knows he will never have to be bound by his rhetoric.

For Mr Key, the challenge is even bigger. Any backlash to the Crafar deal could snowball into a wider anti-foreign ownership campaign against the partial float of government-owned assets. Having pegged the SOE sale as central to its economic plan, National can't afford to go back on its decision to sell. Which is why minimising the backlash tops the list of Mr Key's three big challenges in his second term.

What are the others?

Surviving a second term without collecting too much political baggage.

Helen Clark was teflon-coated in her first term and most of her second term. But even she had nothing on John Key. He has had a staggeringly long run of success in the polls and has carried the public with him through recession, rising unemployment, and a succession of natural disasters. It probably helped that his government came into office skint, at a time when many Kiwis were also skint. They shared its pain.

As in his first term, Mr Key will probably be careful not to squander too much political capital on too many unpopular policies. But if National is serious about cementing its legacy as more than competent managers, the rubber has to hit the road in its second term. Its plans for radical welfare reforms and a bigger squeeze on the public sector probably won't rock the boat too much with voters - unless it gets the balance wrong - - but the sale of the government-owned energy companies will. National might have won a clear mandate to go ahead with the sales, but that is not the same as winning the argument. It will be a tall order for Mr Key to maintain his popularity while pushing through unpopular polices, without looking arrogant.

If National wants a third term, he will have to be even more ruthless with errant ministers than in his first term, find a way to stay in touch with middle New Zealand, which becomes harder the longer a prime minister is in office, and keep the feet of his ministers firmly on the ground.

A few years of chauffeur-driven limos and being kow-towed to by public servants is enough to turn anyone's head. The mistake is taking it for granted or assuming it's well deserved.

And there is the economy.

The good thing about being a first-term government is virtually all bad economic news can be sheeted back to your predecessors.

Unfortunately for National there is a three-year time limit on that excuse and while things look rosier now than they did when it took office, the outlook is still pretty dismal. Mr Key has already begun the job of softening us up for a drop in Treasury's optimistic growth forecasts of last year.

Unemployment remains stubbornly high, and the only saving grace is that it did not reach the scary peaks that some predicted at the start of the financial crisis.

National's defence is that we are at the whim of a volatile global economy that continues to stutter. The election result suggests voters accept that reasoning. But if there isn't a turnaround some time in the next three years, voters will start looking around for someone who offers a greater sense of urgency.

The huge risk for National is that the books will still be in the red in 2014-15, even after it has "flogged off the family silver".

The only consolation for the Key Government should it fail to get the economic mix right is that in three years time, the disgruntled, grumpy and disaffected voters might have all upped sticks and left for Australia by then anyway.