The Government recorded a deficit of $6.3 billion in the financial year to 30 June.
While it spent the same as it did the previous year - $64 billion - its income from taxation fell by $4 billion to just under $51 billion.
Finance Minister Bill English says that both the operating deficit - once investment gains and losses had been excluded - and the cash deficit were higher than in the previous year.
He says there's no room for the Government to ease its spending restraint: new spending will have to be limited to $1.1 billion a year until 2016, when it expects to begin running surpluses again.
Mr English also has no good news for retailers, saying households have cut back on spending much more quickly than forecast.
He says economic growth over the next few years will depend on exporters doing well.