Prime Minister John Key has rejected Treasury criticism of the Tourism Ministry for failing to find cuts to spending, saying he is likely to increase funding for this sector in coming months.
Budget papers released on Thursday reveal the Treasury was disappointed in the lack of savings from tourism and ministerial services - portfolios Mr Key is responsible for.
Finance Minister Bill English said departments that avoided cuts this time would not be so lucky next year.
But Mr Key said on Friday the Treasury was wrong to suggest cutting the tourism budget, which is substantially spent on marketing New Zealand as a holiday destination.
The Treasury said there is little evidence to support whether the marketing campaigns are value for money.
However, Mr Key said now is not the time to cut back on marketing overseas, particularly in Australia.
The Tourism Ministry offered a cut of $375,000 in one year, whereas the Treasury believed tourism could make savings of nearly $6 million over four years.
In its paper, the Treasury said its view on the savings submitted by tourism was not favourable.
Treasury recommended to Mr English that he ask Mr Key to instruct his officials to develop clear and robust measures to determine whether the money spent on tourism was providing value.
Departments under scrutiny - English
Mr English says departments that held back will come under scrutiny next year, as Government will have to look carefully at spending across the board.
The papers, dated 13 March, also revealed ministers had briefly considered making a one-off payment to taxpayers to stimulate the economy during the downturn.
The idea was considered in February as ministers were deciding to scrap the second and third round of tax cuts.
Mr English says idea was dropped soon after, as forecasts got worse the focus shifted to making sure debt did not spiral out of control.
