The government's finances have taken a $331 million hit, largely due to problems recovering money from failed South Canterbury Finance's tangled set of related party loans.

A Treasury paper out today argues for lower tax and less government spending, saying the size and the structure of government plays an important role in economic performance.

Prime Minister John Key was called a liar when he fronted a meeting in Timaru last night packed with vocal Allan Hubbard supporters. The PM was forced to defend the Govt's handling of South Canterbury Finance to a bositrous 500-strong crowd

John Key says a national memorial service will allow all NZers to mourn, with details of the service to be announced early next week.

A search for survivors has now become a grim effort to recover dead bodies from the rubble of Christchurch city centre.

The Government's budget in May will show the cost of the Christchurch earthquake, Prime Minister John Key says.

The New Zealand dollar may extend its losses this week as the cost of the Christchurch earthquake becomes clearer.

John Key indicated last night that Earthquake Commission levies could triple because of the damage caused by the Christchurch earthquake.

If increased levies are needed to replenish Earthquake Commission funds then the Government would consider it, Prime Minister John Key says.

Foreign investors boosted their share of government debt on issue last month to just shy of $28b, as the Crown borrows $300m a week to maintain its spending programme.

The Govt's case for selling down some asset stakes sits on a three-legged stool. On examination it is not particularly sturdy.

Just 6 per cent of investors think shares offer the best rate of return, while rental property is still a popular investment, according to a survey by ASB.