Prime Minister John Key is confident measures being taken in this month's Budget will prevent the country's credit rating being downgraded.
Mr Key has signalled the Government will defer tax cuts planned for the next two years and suspend contributions to the New Zealand Superannuation Fund.
He says the Government's debt outlook compares favourably with the debt of other countries in the latest forecasts by the Organisation of Economic Co-operation and Development.
Mr Key says the United States, Japan and the UK are predicted to have substantially higher debt levels by 2012-2013 than New Zealand.
Meanwhile, opposition parties want to see the money the Government saves by delaying tax cuts spent elsewhere to help the economy.
The Labour and Green parties say the Government should not be obsessed with debt.
Labour's finance spokesperson, David Cunliffe, says savings made from deferring tax cuts should be spent in other areas to boost employment.
The Budget will be announced on 28 May.