Prime Minister John Key says the Budget in May is likely to be another zero Budget if the Government is to reach its target of returning to surplus by 2014-15.
In the financial statements for the seven months to the end of January, the Treasury says income tax, goods and services tax (GST) and corporate tax were all below what it forecast just before the election in November last year.
The operating deficit was $473 million higher than forecast.
Mr Key says any new spending for the likes of health and education will have to come from savings elsewhere.
Meanwhile, Finance Minister Bill English has ruled out big cuts to existing programmes even though he has confirmed there will be no extra spending in this year's Budget.
Last time the Government made serious savings it cut incentives for KiwiSaver and made it tougher to get Working for Families tax credits.
But Mr English says he does not expect similar changes to be made in the 2012 Budget and savings are being made as government agencies come under pressure to perform more efficiently.