May's budget will deliver a long-term debt track showing a downward trend, Prime Minister John Key said today.
Mr Key told journalists the Government had taken decisions to ensure that New Zealand's credit rating would not be not downgraded due to long-term forecasts of Crown debt spiralling ever upwards.
"I think we are taking the right steps, we are getting on top of our debt curve and at this stage that has been our focus as opposed to anything else," Mr Key said
Asked if that meant the budget would show lowering debt levels, Mr Key replied: "It stops sloping upward...(and heads down) over time".
Both Mr Key and his finance minister Bill English have cast doubts about whether tax cuts scheduled for 2010 and 2011 are affordable, but said they will go ahead if possible.
A TV3/Reid Research poll tonight said 52.6 percent said the planned cuts should be canned, 37.9 percent said they should go ahead and 9.5 percent said they didn't know.
Mr Key said New Zealanders were realistic about the economy and what could be afforded.
"The economic conditions in the last six months have deteriorated substantially from what they expected to take place when the election occurred," Mr Key said.
He would not elaborate at how debt levels would be brought down.
"We have made a number of decisions across a number of areas (that will be)... announced in the budget."
Mr Key did say that the size of the housing insulation project had grown not reduced during the ongoing budget round.
The poll also showed that most people were not spending the extra money, but instead paying off debt or saving.
Mr Key said how people used the extra income would vary over time, there had been a lot of concern about the economy and people were being cautious and this would turn around in the future.
Mr English last week prepared the ground for a tough budget , in a speech that painted a bleak picture of the economy.
