English promises some deficit relief in Budget

New Zealand's books are going deeper into the red with debt almost $15 billion higher than forecast in October's pre-election fiscal update, and an operating deficit of $8.4 billion.

The $45.4 billion in gross sovereign-issued debt represents 25.2 per cent of GDP - a huge increase from the 16.9 per cent of GDP in October.

The $8.4 billion operating deficit - for the seven months to February - is $11.6 billion less than in October when a $3.1 billion surplus was forecast.

The net cash position - the difference between all income and spending, including capital spending - is $6.6 billion, which is $1.7 billion more than the October forecast.

The October forecasts were prepared on figures that did not fully take into account effects of the deepening global financial crisis, a crisis that has stunted economic growth, cut government revenues and forced up borrowing to fund big packages for economic stimulus.

Finance Minister Bill English said the May 28 Budget would "map out a road for economic recovery as well as a credible plan for getting the Government's deteriorating finances in order".

He said that while the global recession continued to have an impact on finances, it was clear that the "patently loose spending policies of the previous Labour-led Government were unsustainable".

The latest monthly Government accounts say that tax receipts are $1.6 billion lower than forecast.