PM John Key - The year that was 

Source: NZPAJohn Key

On November 8 last year John Key led National to power after nine years in Opposition, but the celebrations didn't last long.

In those dark days no one knew how bad the international recession was going to be and the impact on New Zealand's economy could have been catastrophic.

"It didn't take very long to realise that the economic situation was deteriorating, and deteriorating very rapidly," he says.

"And by the time we went into Christmas, we knew that budget 2009 wasn't going to be easy."

Looking back, he believes the government did a good job.

"It would have been very easy for us to panic and have a slash and burn budget."

"At the other extreme there was also huge pressure on us to be very irresponsible with our spending and end up in a position where future generations would pay the price for that."

"I think there's been a combination of confidence, determination and pragmatism. Sensible, actually."

Did it worry him, leading a government that was dealing with such dire economic circumstances?

"No, I'm not a worrier, and no, I wasn't overly worried. I always thought we should have a rolling maul of initiatives...if we spent all our chips on day one we wouldn't have any to take back to the table."

"We had a strategy and we were getting a sense of how it was going to play out."

Before getting to grips with the recession, Key had to form a government."

National had won 58 seats in the 122-member Parliament and he needed a support party. Act was the natural choice but Key wanted a broader mix. So he talked to the Maori Party which, like Act, had five seats.

In Opposition, Key had changed National's attitude to Maori. He reversed Don Brash's divisive tactics and was already moving towards the Maori Party.

So it wasn't difficult, he said, to sign up Pita Sharples and Tariana Turia to a support role in his new government.

"I think it's been one of the best decisions we've made," he says.

"The influence of both Act and the Maori Party is being felt in the way we approach decisions and the legislation we're producing.

"Of course it delivers a degree of angst and incompatible positions from time to time between our support parties but the net benefit far outweighs any of those challenges."

Key believes "the chemistry was right" between himself, his deputy Bill English and the Maori Party co-leaders.

"Hopefully, in years to come, people will Look back on it and say it was an important step for New Zealand."

Key gave ministerial positions to the leaders of his support parties and chose his cabinet from National Party MPs.

It was a mix of experienced MPs who had served in the previous National government and newcomers such as Steven Joyce, who had been an MP for only a few weeks.

"I think it's worked very well, I think they're quite a formidable team," he says.

"I'm not anticipating a reshuffle...there's a possibility of minor changes but by and large I've got enormous confidence that ministers are delivering in the areas we think are really important."

Key runs his cabinet with a loose rein, very different to his predecessor.

"I've got a different style to Helen Clark. I think you've seen less control, less domination of ministers.

"We've given them a more open Canvas to operate on.

"From time to time there will be some issues created by that, but a lot of opportunities are also created by having that much more confidence in the people who work for you and form part of your team.

"It doesn't mean we get everything right or we can't learn from experience. From time to time there have been examples of that."

Ask Key whether he is a control freak and the answer is firm.

"No, I'm not. I have a high degree of trust in my ministers. If they let me down I'll change them but to date I think the approach has been the right one."

Key's year hasn't been short of crises, including the departure of Richard Worth amid a scandal . They've been distracting, and Key doesn't like distractions.

"But they're inevitable when you're dealing with so many issues and so many personalities," he says.

"I think the important thing is to show some leadership, deal with them and get back on track - not fixate on the fact that you have them.

Some hard calls were needed to shut down those crises, and in the broad range of important issues the Government has dealt with in its first year.

"I try to make decisions from a position of being informed, but sometimes the nature of what's happening and the speed it's moving requires you to be very intuitive.

"I trust my instincts and generally my first instincts are right. But I try to consult and it's very important a team of ministers is consulted."

Key says he isn't afraid to make decisions and doesn't think he's taken any risks.

"Some of them are really difficult.

" Sending the SAS to Afghanistan was probably the most difficult personal decision I've made, simply because there is unquestionably a degree of risk...but I absolutely believe it was the right decision to make in New Zealand's national interest."

Key doesn't think he has made any decisions he wasn't comfortable with.

"You have to feel good about the decisions you make otherwise the public will see very quickly you don't believe in what you're doing.

"I sleep very well at night."

After 12 months in office, National is higher in the polls than it was on election night. Significantly so, with some surveys showing it pushed 60% and Key way ahead as preferred prime minister.

He admits finding some of those polls hard to believe but there's no doubt about the popularity of his Government.

"I think part of it reflects that Labour said we couldn't be trusted and there were some people who went into the election wanting to vote for us but in the final analysis weren't quite sure," he said.

"And during the 12 months we've been in office we've actually proved to them that we can be trusted, and that we are a moderate centre-right government."

When Key became prime minister he had very little experience in foreign affairs, which opponents saw as a weakness.

Within days of the election he left for the Asia-Pacific Economic Co-operation (Apec) summit, anxious to hear the views of other world leaders on the international recession.

Since then he has criss-crossed the world, leading New Zealand's diplomatic and trade missions.

"I think its an area where I've personally been pleased with my performance," he said.

"I'd like to think I've represented New Zealand with pride overseas, I can't think of any negative issue that's been created as a result of any of the trips I've made."

Key says prime ministers are lucky when it comes to foreign policy because they've got so much support from the ministry.

"They're stacked with world class people -- but nevertheless, there's a point where you're swimming in the bathtub on your own.

"I wasn't overly apprehensive, but every relationship is different.

"I've been very lucky in terms of Australia because Kevin Rudd's a great bloke, he's wanted to have a strong relationship between New Zealand and Australia , he's recognised the importance of that."

During his first year in office, Key has stamped his own personality and style on New Zealand politics in ways no other National leader has done.

"I'm less tribal," he says.

"I have strong beliefs in certain values and principles, I think they're closely aligned with the principles and values of the National Party.

"But I'm not so ideologically driven...in the end, government is always about resolving issues and if you want perfection, politics is the wrong place to look.

"You've got to be prepared to look at compromises and changes. And anyway, the really deep, hard and firm demarcation of the left and right in modern-day politics has evaporated."

TVNZ 7 shined the spotlight on National with a politically focused debate about the performance of the government's first year, their policies, and how they have delivered in terms of getting New Zealand through the recession.

Click here to watch the National's First Year debate on TVNZ Ondemand