Finance Minister Bill English warned of tough budgets to come in his post-budget speech in Wellington this morning.
Mr English delivered a budget yesterday that axed planned tax cuts, suspended payments to the New Zealand Superannuation Fund and reduced long-term spending increases.
However there was $3 billion more spending.
Speaking to a business audience in Wellington Mr English said it was wrong to characterise this budget as "slash and burn" but warned future budgets would be tight.
"If that's what you call a $3 billion increase in government spending in the middle of a recession then I don't know what you would call expenditure constraint," he said.
"We've given the leadership of the public service and those people on the front-line a year where there is still a big inflow of cash, but it is time for everyone to get their thinking cap on and understand the world has changed." Next year's new spending is limited to $1.45b and after that $1.1b.
"This budget has been largely about getting the low hanging fruit, tying up the loose ends left over by the last government and it turned out there were several billion of those.
"And from here we're taking a three- to five-year view with the objective of providing better and faster public services for about the same resources." In the next budget National would have fulfilled many pre-election commitments so would be able to better focus where available increases were used, Mr English said.
In his speech he touched on structural changes in sectors such as health and education and said big budget increases had not translated into better results.
Questions would be asked about value for money but Mr English said in most cases it would be about restraining budget growth.
Mr English said there would be competing priorities when the Government was in a position to reconsider contributions to the super fund.
When questioned by reporters he clarified: "We've said we will start contributing again when we've got surpluses. And those contributions are built into the forecasts".
He said there was no need for a debate around superannuation entitlements and there were no plans to change the age of eligibility.
