2010: A testing year in politics

The Canterbury earthquake, the Pike River mine disaster, the collapse of South Canterbury Finance, blizzards, droughts and the kiwifruit canker.

Rarely, if ever, has a government been so severely tested in the second year of its first term by catastrophes outside its control.

Prime Minister John Key and his ministers proved they could handle the pressure of events, which eclipsed even the rampant personality politics of 2010.

Departures and stumbles
David Garrett left Parliament in disgrace after admitting he stole a dead child's identity to get a false passport; Pansy Wong resigned over her ministerial travel claims; and Chris Carter was expelled from the Labour Party after a ludicrous attempt to bring down its leader.

Labour's Winnie Laban announced she was leaving politics and leader Phil Goff made the mistake of saying the Mana by-election would be a test of the government's policies and popularity. Labour retained the seat with a much-reduced majority.

Shane Jones suffered his personal annus horribilis, found out using taxpayer money to watch blue movies, and Bill English was for most of the year taunted by Labour over the Wellington housing allowance he no longer claims. Phil Heatley handed in his ministerial warrant over two bottles of wine he should have charged to a different credit card and was swiftly reinstated after an inquiry cleared him of any other misuse.

For a government that had managed to please most of the people most of the time during its first year, there was a vital agenda to run in its second.

Key set the stage with his speech to Parliament in February, confirming the tax cuts policy and giving for the first time the now familiar assurance that "the vast bulk" of people would be better off. Labour countered with its new slogan "For the Many not the Few," which it ran for the rest of the year as it accused the government of favouring the rich.

The Act Party held its fateful annual conference that month, when deputy leader Heather Roy's speech was an exercise in disloyalty which sowed seeds of disaster, and the Maori Party's flagship Whanua Ora welfare policy began to emerge.

Widening gap with Australia
In March, catching up with Australia started to catch on - a campaign promise National was never going to achieve and which Labour seized on as evidence of the government's dream-weaving dishonesty. The 2025 Taskforce was working on it, later delivering recommendations which ministers rejected as "too radical". Amid the war of words and figures, it was obvious the gap was growing.

The government began focusing on getting "better value for money" from the public service, which Labour saw as code for cutting services and jobs.

Opponents of mining conservation land took to the streets of Auckland, and the intensity of public concern frightened the Government - in July it scrapped the plan it was never going to be able to sell.

During April the framework of the legislation to replace the Foreshore and Seabed Act was announced. Little notice was taken and the government began negotiating with the Maori Party.

The government affirmed the UN Declaration on the Rights of Indigenous Peoples, which it described as "symbolic" but which was hailed by Maori politicians as a giant leap forward. Its irrelevance was quickly obvious.

Tax cuts and increases
The May budget carried income tax cuts, an increase in GST and the government's first step in its economic rebalancing agenda - save more, spend less. It worked faster and better than anyone expected, leaving the retail and manufacturing sectors flat for the rest of the year. Managing a forecast deficit of more than $10 billion, the government was borrowing $240 million a week.

In June, Mr Key gave an assurance that KiwiBank wouldn't be sold on his watch and the government reached agreement with the Maori Party on the new foreshore and seabed legislation, now called the Marine and Coastal Area (Takutai Moana) Bill. There was trouble ahead, but they didn't seem to sense it.

National held its annual conference in July, still riding high in the polls and boldly taking on the unions with employment law changes which would lead to fierce debates in Parliament. By the end of the year, the 90-day probation period had been extended to all businesses and cashing in a fourth week of annual leave was in law, effective April 1.

August belonged to Labour and Act, for all the wrong reasons. Mr Goff was making headway, at last, over the failure to close the gap with Australia and the government's refusal to lower the drink driving limit. Mr Carter blew that out the water with his letter to the media claiming a caucus coup was imminent, and the situation became more ridiculous by the day.

Act inflicts self-damage
Mr Goff dealt sternly with him but Mr Carter hogged the headlines until he was relegated by another scandal. Act blew itself apart when Heather Roy was ousted as deputy leader and her devastating dossier on Rodney Hide's allegedly ghastly behaviour was leaked. The party desperately glued itself back together but the damage was severe and the poll ratings showed it.

Labour's September annual conference was as good as it gets for an opposition party. Mr Goff finally moved out of Helen Clark's shadow, new policies were announced and Labour's activists were alive and well as they charted strategy and told themselves National was a one-term government.

The tax changes announced in the budget started on October 1 and that was the month the government saved The Hobbit movies. The deal with Warner Bros raised furious debate over the propriety of letting a multinational have its way with taxpayer cash and changing employment law under urgency, but ministers were confident the public was on their side.

US Secretary of State Hillary Clinton visited in November and the state of the relationship was said to be "better than ever" - a description used numerous times over the past few years. The Wellington Declaration was signed, formally acknowledging bilateral co-operation which already existed. The media decided Secretary Clinton's visit had been a great success.

Labour retained Mana in a by-election but National claimed victory - a safe seat majority of 6155 was slashed to 1406. The 6.6% swing to National in heartland Labour territory was seriously bad news. National's candidate, list MP Hekia Parata, was appointed to the Cabinet. In March there will be a re-match when National defends Mrs Wong's safe Botany seat. Neither of the main parties had wanted to carry the cost of another by-election.

Perks, pledges and polls
In the last weeks of 2010 the Law Commission released its reports on entitlements and allowances for MPs, recommending the whole besmirched system should be handed over to the Remuneration Authority. Within hours of it being presented to Parliament, Mr Key had accepted it and MPs succumbed to losing control of their perks without a whimper of dissent.

After the string of scandals, none dared say they wanted otherwise. Mr Key had wanted to be rid of them for months: losing Mrs Wong because of travel allowance rule-breaking was the last straw.

Mr English presented his half-year economic update, revealing the deficit was forecast to reach $15 billion. He insisted the books would be back in surplus by 2015/16.

The Maori affairs select committee concluded its hearings on the foreshore and seabed replacement legislation, and an overwhelming number of iwi submitters strongly opposed it because of the test for customary title.

The Maori Party's pledge to take guidance from the opinions of its supporters placed its MPs in an invidious position which they will have to resolve, somehow, next year. The government won't weaken the test, the Maori Party must continue to support the bill or it will lapse and the Foreshore and Seabed Act will stay in force.

Through all this National held its ratings and Mr Key continued to be a remarkably popular prime minister. The last opinion poll of the year said it all - National 55%, Labour 33%, virtually unchanged since January and a strong sign that if the government doesn't lose its way a second term is there for the taking next year.