NZ finds $4 billion savings but no tax cuts in budget

The New Zealand government has "reprioritised" $4 billion after a search for savings that will be unveiled in next week's budget.

Finance Minister Grant Robertson has also revealed there is no room for tax cuts in the May 18 budget, which comes less than five months before the election.

In a speech to the Wellington Chamber of Commerce on Thursday morning, Mr Robertson took aim at the opposition National party, which is promising tax cuts through re-indexing income tax brackets.

"Others may suggest to you that inflation means that the Government can afford to do any number of things, including tax cuts," he said.

"This might be a convenient political line to run, but it is not an economic policy appropriate to this time."

Speaking after the breakfast, Mr Robertson was even more certain.

"Tax cuts are not the appropriate economic strategy when we're facing recovery from a cyclone and significantly higher inflation than we had wanted," he said.

Mr Robertson also announced the $NZ4 billion ($A3.8 billion) find, the result of an order from Prime Minister Chris Hipkins to his ministers to to strip back their agendas to focus on the cost of living challenge.

This much-repeated "bread and butter" approach involved shedding many projects deemed inappropriate for the economic times.

"We owe it to New Zealanders as they are carefully considering their spending, and making trade-offs in their lives, that we do the same," Mr Robertson said.

Some of these deferred or axed projects - including a public media merger, climate initiatives, a social insurance scheme, hate speech reform, and Auckland light rail - have already been announced.

Mr Robertson said "for the most part, this funding has gone toward funding agencies existing cost pressures".

The full list of projects and budget lines on the chopping block will be announced in the budget.

Opposition ACT party leader David Seymour lashed the $NZ1 billion ($A939 million) annual saving as "embarrassing" and too small.

The reprioritisation will also help fund the rebuild from Cyclone Gabrielle, which lashed NZ in February.

Treasury estimated the cleanup bill to be between $NZ9-14.5 billion ($A8.5-13.6 billion), which includes infrastructure and residential repairs in several regions.

Mr Hipkins announced last month the government will not borrow to fund the rebuild, instead utilising existing funding envelopes.

Mr Robertson said it would not announcing projects en masse next Thursday.

"People are desperate for certainty. I one hundred per cent understand that," he said.

"These decisions are consequential. We're going to see more of these weather events ... we've got to make sure we get that right given that we're going to have to be dealing with these many years to come."

That cyclone bill is likely to see Mr Robertson unveil a budget in deficit.

Earlier this week, Treasury posted updated financial statements showing a worsening fiscal outlook.

In the nine months to March, Treasury recorded a deficit of $NZ3.4 billion ($A3.2 billion), almost $NZ2.5 billion ($A2.3 billion) worse than predicted in December.