By Duncan Garner
Prime Minister John Key says it is now likely the Government will not spend any new money in this year's budget.
The Government had planned to spend $800 million more in the May budget but Mr Key says because of the Christchurch earthquake - that now will not happen.
“Certainly I wouldn't expect a lot of new spending if there's any in the budget,” says Mr Key.
The Government plans to borrow up to $10 billion to pay for the damage caused by the Christchurch earthquake.
And that means its budget plans have changed.
It will take money from certain departments and spend that money in health and education - meaning no additional new money will be spent in this year's budget at all.
Last year the Government had a $1.1 billion cap for new spending in the budget.
But it cut that to $800 million for this year - now that has been cut too.
And Labour says people should be concerned.
“Clearly pulling $800 million out will affect low and middle income New Zealand,” says Labour leader Phil Goff.
Greens co-leader Russel Norman says the cuts will be significant.
“It’s going to come from somewhere but it can't be just little cuts here and there - its too much money - its going to be significant cuts,” he says.
Labour too needs to reprioritise and ditch some of its hefty promises.
But Mr Goff says Working for Families shouldn't be touched.
And he won't dump his $10 a week tax cut costing $1.3 billion - because he says it stacks up.
“I think so and I’ve said the reasons why I think it's affordable,” says Mr Goff.
The Greens are also pushing for a one off levy or tax to pay for the damage caused by the Christchurch earthquake.
Mr Key says he doesn't agree with it and he was supported by Mr Goff today.
Mr Goff says like Mr Key it is best to borrow more money from overseas to rebuild the garden city.