[s] The global financial crisis leaves relatively little room to move on new spending proposals, says Finance Minister Michael Cullen.
Dr Cullen says he will emphasise that point to colleagues as they move toward final deliberations on policy.
World stock exchanges continue to be volatile after investment bank Lehman Brothers filed for bankruptcy this week and fears for other major financial institutions rattled markets.
Dr Cullen says the extent of the crisis will have flow-on effects for New Zealand's rate of growth, although he still expects the economy to pick up later in the year.
Echoing similar themes, Prime Minister Helen Clark says the time is not right for reckless borrowing or spending, and Labour will have "modest" policy promises for the election campaign.
Miss Clark says the pre-election fiscal update is likely to forecast cash deficits for the foreseeable future, and promises will have to be within the bounds of what is possible.
National Party finance spokesperson Bill English says his party is also considering the conditions.
But Mr English will not be drawn on whether the global situation will force National to reconsider the level of tax cuts it plans if it wins the election.
He says National has indicated that the cuts will be close to the amount signalled earlier, but people will have to wait and see.
Interest rates likely to rise - Brash
Former Reserve Bank govenor Don Brash believes the turmoil in the international financial markets will affect the cost of borrowing in New Zealand.
Dr Brash said on Wednesday that New Zealand has been borrowing on the international markets for a long time and this exposure is likely to raise interest rates here.
He says the fall of the dollar against the US currency, caused by the slowdown, will reduce pressure on New Zealand's exporters.