Prime Minister John Key says this month's Budget will not be a doomsday Budget despite tough economic conditions.
In his only pre-Budget speech, Mr Key told business leaders in Wellington on Thursday that there will be more spending than ever on public services in health and education.
However, Mr Key said the Budget will see the Government taking steps to get borrowing costs under control, by delaying some steps in its economic plan that it would have rather made sooner.
There will also be reductions in the amount of extra spending available for future budgets.
Mr Key also warned that some Government programmes will be cut and others 'reshaped'.
The Budget is due to be delivered on 28 May.
Crown deficit rising
Public accounts for the nine months to the end of March show a cash deficit of $7.72 billion.
Tax revenue was around $1.9 billion below forecast with tax revenue being $700 million lower than expected.
In October, the pre-election forecast was for a surplus of $3.44 billion.
The Treasury said on Wednesday the deficit was largely because of $5.3 billion in losses from various state investment funds, $2.4 billion from a pension fund liability and $2 billion losses arising from disclosures of workplace accident insurance liabilities.
Net debt stands at $5.12 billion, which equates to 2.9% of Gross Domestic Product.
