The Government is getting on with investment in infrastructure and housing and policies that help business, Finance Minister Bill English said in the aftermath of a shock unemployment report.
Opposition parties have called for urgent government action to create jobs after the unemployment rate unexpectedly rose by half a percentage point to 7.3 percent in the September quarter, the highest level in 13 years.
Mr English told TV3's The Nation programme this morning that the Government had spent about $50 billion in supporting the economy through a downturn and it could not keep doing that.
But he added: "What we've seen this week just encourages the Government to get on with its policies such as investment in infrastructure, getting its own house building going, supporting businesses to help them create jobs because it's tough out there in the job market, particularly for young people."
He said the rise in unemployment was out of line with other economic indicators.
The unemployment report last week showed a significant increase in unemployment in Auckland but the numbers of people on the unemployment benefit in Auckland was dropping.
In the last three years the New Zealand economy had picked up to moderate growth rates.
"We are seeing businesses and sectors that are doing reasonably well, others that are struggling but we're on track for 2 to 3 percent growth and that means more new jobs," he said.
"This is a grinding recovery," he said.
Earlier Prime Minister John Key said the Government was not going to change its policies.
"We are on the right track in our view," Mr Key told reporters on Thursday.
The New Zealand economy expanded by 2 percent in the year ended June 2012, which was the biggest annual increase since the year ended March 2008, Statistics New Zealand said in September.