KEY POINTS:
What on earth did Act think it was doing letting Sir Roger Douglas spell out his hard right agenda for New Zealand's economic salvation as if it was Act policy?
Thursday morning's press briefing was designed to garner more publicity for Act off the back of Sir Roger's high-profile return to the party's inner sanctum.
It sure did that. But it was sloppy tactical thinking on Act's part. If parading Sir Roger was supposed to help Act by pushing its brand, it was never going to help National. And Act needs to help National so there is a centre-right Government that Act can be part of.
Letting Sir Roger loose in front of the press at Parliament to talk up his radical prescription for change was like throwing a hand-grenade into a crate of explosives in the current political environment.
Why? Because rarely, if ever, has an election campaign been fought so early and so intently in election year. Labour is throwing everything, including the kitchen sink, at National in the hope that John Key will crack under the pressure.
With Rodney Hide boasting last weekend about Sir Roger returning to the Cabinet under a National-led Government, Labour was already rehearsing its "Vote National and you get Sir Roger" refrain.
So when Sir Roger popped up on Thursday, Labour was looking at a rather large free hit and National was looking at the prospect of its centre-ground support fleeing back to Labour.
Sir Roger had been asked by Rodney Hide to lay out his policy prescription for getting New Zealand's living standards on a par with Australia by 2020.
No one can accuse Sir Roger, now 70, of watering down his medicine. There would be the obligatory wholesale restructuring of the personal tax system with large tax-free thresholds and significantly lower rates applying on income above those thresholds. Welfare eligibility would be drastically tightened. More choice in health care would see doctors and nurses being able to rent public hospital wards as long as they lifted productivity by 50 per cent.
Perhaps most controversial of all was Sir Roger's call for a complete review of Government spending which he said could produce savings of up to $5 billion a year.
That would amount to a cut close to 10 per cent. Labour would have had a field day painting images of Sir Roger and National slashing Government-provided services.
Key was immediately put on the spot. Would he be torn between loyalty to a centre-right ally or preserving his party's support? It was no contest.
Key was forthright. National would not sell voters down the river by presenting itself as a pragmatic, moderate conservative party before the election only to run an Act-instigated far right agenda in Government afterwards. And no, Sir Roger would not be a member of his Cabinet.
It was a faultless display from the new "decisive" Key - but one once again made on the defensive.
It is not how National envisaged things panning out this year. Instead of Labour slowly sinking under the "tired and worn-out" label, the governing party has got over a poor start to the year. It is now running a two-pronged strategy of rolling out big policy initiatives to demonstrate it still has fresh ideas, while waging an unrelenting offensive on Key.
This onslaught sees every utterance by Key scrutinised for any hint of inconsistency, hesitation, vacillation or contradiction. Even the tiniest error or imperfect statement or response is seized on by Labour as further evidence of unfitness to govern.
Some of Labour's highlighting of Key's supposed inadequacies as a prime minister-in-waiting has stood up; a good deal hasn't. Labour is at times in serious danger of over-cooking alleged lapses.
As yet, there is no evidence this strategy is working. Given how far it is behind National in the polls, however, Labour simply believes it has no choice. Labour is not expecting an instant slide in Key's preferred prime minister ratings. The dictum in the Beehive is "water on stone". And the more water the better.
The puzzle is why Hide let Sir Roger provide it by the bucketful. Sir Roger might not have been talking Act policy, but it sounded like what he was saying could become Act policy.
Act may need Sir Roger's agenda for re-branding purposes. His ideas are a lot more exciting than Hide's endless mention of his red-tape cutting Regulatory Responsibility Bill. But there is a consequent risk Sir Roger could overshadow Act's leader.
The other question is how Sir Roger's broad-brush reforms would square with Hide's strategy of developing bottom-line positions on just two or three issues from which Act hopes to extract policy concessions from National. The lesson from Thursday is that parties on the same side of the political spectrum are mutually obliged not to do things which end up disadvantaging both.
Witness Labour's rapprochement with the Alliance before the 1999 election as an example of how to operate in each other's best interests.
Co-operation on the centre-right has stretched only as far as National's not mounting a full-on effort to win back Hide's Epsom seat. If Hide holds Epsom, Act does not have to reach the 5 per cent threshold and voters can support Act knowing their votes will count.
If Act can win three or four seats, it will make it easier for National to form a Government. It is win-win for both parties.
However, Thursday's behaviour was lose-lose by jeopardising National's grip on centre-ground voters and in the process Act's big chance of being in Government.
Act cannot afford to upset National by overplaying its limited hand. Its bargaining power is weak. Hide has to vote with National or feel the wrath of Epsom voters. At the end of the day, National can largely dictate the terms of its engagement with Act.
Moreover, National may yet have other options if the polls continue to show it forging ahead of Labour in coming months. Labour's vote will collapse as some of its supporters look around for parties that will keep National in check in Government.
NZ First is the obvious candidate. Ignored this week was Winston Peters' reinforcement of his earlier declaration that NZ First will negotiate first with the party that wins the most seats. He has now added the following: "We will work with the party the voters tell us to." It is a signal he is willing to enter serious negotiations with National.
That National might not need Act at all after the election is reason for Act to think more carefully about how it plays things beforehand.
