"You can't maintain this fiscal track by throwing money and hoping it will work" Mr English said, referring to the Opposition's fiscal plans as "random dumb spending approach".
Mr English said it was his Government's intention to reduce taxes "when conditions allow it".
He confirmed his Government's operating allowances which rise by $1.5 billion a year over the next four years included some headroom for tax cuts but none would be announced before the election.
The Government was leaving room for more ACC levy reductions, but it was important it did not overcommit itself, and left itself some fiscal headroom.
He criticised the Opposition for fully committing all of its spending for four Budgets in advance, leaving itself little room to contend with emerging challenges except by taking on more debt or increasing taxes further.
At this year's Budget, Treasury had forecast the 2014-15 return to surplus, which the National Government has promised as a key indicator of its economic management skills - would be $372 million as measured by the operating balance before gains and losses (Obegal). This morning, it trimmed that back to $297 million.
Mr Makhlouf said the outlook for economic growth was slightly weaker than forecast in the May Budget in nominal GDP terms, "and this will impact on the Crown's finances".
While the Crown was expected to run surpluses beginning from the the current financial year, "the profile is weaker than anticipated in the Budget".
Watch: Budget 2014: English 'return to surplus'
The key driver in the changed forecasts was a lower tax take, reflecting the softer economic outlook.
"Prudent careful management of the Crown's finance's remains a priority as the Crown looks to maintain annual surpluses and remain on track to pay down debt", Mr Makhlouf said.
Mr English said the new forecasts "confirms New Zealanders have the opportunity to build on their hard won gains of recent years -- providing we stick with the Government's successful programme".
"Now is certainly not the time to put New Zealand's good progress at risk with more taxes and sharply higher Government spending." Labour Leader David Cunliffe yesterday said his party would trim its spending plans if today's forecasts outlined the Crown's finances would be softer.
Meanwhile, Mr Makhlouf said key risks to the forecasts included were geo-political risks that could affect the international trading environment.
There were also risks around how households responded to recent interest rate increases, risks around the pace of the Canterbury rebuild and some uncertainty around emerging market economies and how they responded to interest rate increases in the major economies including the US.
Addressing recent falls in dairy price, Mr Makhlouf said should that continue, "this could have negative implications for the economy and the Crown accounts over the forecast period".
Mr English said the slightly softer outlook meant net debt would now fall below 20 per cent of GDP in 2020-21 -- a year later than previously forecast. That meant a National Government would also delay the resumption of contributions to the NZ Superannuation Fund by a year.
How key forecasts have changed since the Budget
2014 (actual) / 2015 / 2016 / 2017 / 2018
GDP Prefu: 3.3 / 3.8 / 3.0 / 2.2 / 2.1
GDP Budget: 3.0 / 4.0 / 3.0 / 2.1 / 2.1
Surplus/(deficit) Prefu: ($2.6b) / $297m / $818m / $1.85b / $2.96b
Surplus/(deficit)/Budget: ($2.45b) / $372m / $1.26b / $2.37b / $3.49b
