John Key stuns the nation
Parliament was winding down for Christmas when Prime Minister John Key stunned the nation with his resignation announcement.
Only his deputy Bill English had known, and National's caucus was astonished. They had expected Key to lead them into the 2017 general election, seeking a fourth term after maintaining his phenomenal personal popularity for eight years.
But Key decided he couldn't see through another term, he had "used all the gas in the tank", and it was time to go.
He left on a high, with National nudging 50 percent in the polls, and his caucus elected English as his successor.
The first polls of the new year will indicate whether English and his reshuffled cabinet will be able to sustain the momentum built up over Key's time in office.
Key's departure will be the political event 2016 is best remembered for, but the year was well stocked with controversy, success and failure:
Flag referendum goes the wrong way for Mr Key
The referendum was John Key's idea, he wanted the silver fern on New Zealand's flag, he backed it and believed it was time for change.
Voters didn't and the result went 56 percent to 43 percent against him.
The referendum had cost $26 million and Labour - despite a campaign pledge in 2014 to do exactly the same thing - denounced him for an appalling waste of public money.
Panama Papers put the Government under pressure
In May, opposition parties were gifted a golden opportunity to attack the Government when the Panama Papers story broke.
New Zealand was implicated as millions of documents detailing secret foreign trusts began to filter out, laying bare a lax regime that favoured those seeking to hide their wealth from tax authorities.
Labour leader Andrew Little led a charge that lasted for weeks and saw the Prime Minister backtrack from saying the system was sound to admitting it needed strengthening.
The Government brought a Bill to Parliament that ensured New Zealand wouldn't be labelled an international tax haven.
Government forced to veto Labour's Bill
In June the Government had to use its financial veto to kill a Bill that had majority support in Parliament.
Labour MP Sue Moroney's Bill would have extended paid parental leave to six months, she had the numbers and strong public support.
National's MPs eventually ran out of delaying tactics and Finance Minister Bill English had to use his financial veto to kill the Bill on the grounds that it would cost money he hadn't budgeted for.
It suffered condemnation from opposition parties and lobby groups but the bottom line was that National wasn't going to give Labour a success it could boast about through to the next election.
Trade Minister narrowly escapes sacking
In July Trade Minister Todd McClay was lucky to keep his job after leaving Prime Minister John Key lost for words over the Chinese steel dumping controversy.
McClay initially downplayed reports that China had threatened retaliation if New Zealand investigated claims it was dumping surplus steel on the local market - and that caused Key to give false answers to reporters.
The minister eventually confirmed his officials had been dealing with the issue for months - he either hadn't known that, or if he did he didn't tell the Prime Minister.
Key took the unusual step of issuing a public reprimand, and McClay's previously unsullied reputation took a hit.
China denied it was considering retaliatory measures.
Easter trading law change divides Parliament
In August Parliament passed a Bill that gave councils authority to allow shops in their area to open on Easter Sunday.
During a series of intense debates the Government insisted it was a pragmatic solution to a fraught issue while opposition parties warned it would create chaos.
Labour's main gripe was that the Government should have the courage to pass a nationwide law rather than leave it to councils - the word "gutless" was used numerous times.
Ministers said it left choices to communities, which was the correct and democratic way to go.
The Bill passed by 62 votes to 59, Easter will show who was right.
Child poverty provokes intense debate
In October, Children's Commissioner Andrew Becroft set a cat among the political pigeons when he called for cross-party agreement on a formula for working out how many children are living in poverty.
"If only we could agree on a rate, we could set a target," said Becroft.
"We need some doable, agreed policies."
No way that was going to happen.
Becroft had his own figure, based on a formula called the material deprivation index, which put the number of children in poverty at 149,000.
The Government vigorously defended its poverty-fighting record but didn't think a single formula for measuring it was a good way of looking at the issue.
Labour accused it of cowardice and Andrew Little accepted the challenge, vowing his party would end child poverty if it was elected although it would take at least two parliamentary terms.
Even Becroft thought that was a tad ambitious.
Another earthquake to pay for
In November a 7.8-magnitude earthquake shook up more than Kaikoura.
The Government moved quickly to help stricken residents and Parliament passed emergency legislation allowing repair work to bypass the Resource Management Act.
Ministers were given extraordinary powers and they started counting the cost.
Initial estimates of "in the billions" were real, and Treasury put the figure at between $2.4 billion and $3b.
With budget surpluses set to increase faster than expected, the Government said it could handle that and might still be able to afford tax cuts.
A by-election boost for Labour
In December, Labour romped home in the Mt Roskill by-election. It was a safe Labour seat but Michael Wood's 6852 majority was bigger than even his own party had expected.
National shrugged it off as a contest it was never going to win while Labour claimed it was a sure sign there would be a change of Government in the 2017 general election.
One of Prime Minister Bill English's first decisions was that National wouldn't contest the February 25 Mt Albert by-election, the seat vacated by David Shearer.
It's rock solid Labour territory and English wasn't going to give the Opposition another chance to trumpet a victory.