Opposition parties have accused the Government of having no plan to help the economy after figures showed tax income has slumped.
The Government collected $12.5 billion in tax instead of the forecast of $13.6 billion during the three months to the end of September.
Labour Party finance spokesperson David Cunliffe says the result is bad news and shows there is still a chance of a double dip recession.
Mr Cunliffe says the Government has no plan to deal with the stalling economy.
Green Party co-leader Russel Norman says the figures show the folly of cutting taxes for the rich when the Government's finances are in so much trouble.
Finance Minister Bill English warned of more spending restraint after Treasury reported that the Government's books were in worse shape than expected.
Mr English say the tax take is $1.1 billion lower than forecast, mainly because consumers are spending less.
In the latest financial accounts, the operating deficit, excluding investment gains and losses, was much higher than expected at $3.7 billion.
Mr English says Treasury expects tax income to pick up in coming months, but the lower-than-forecast tax take reinforces the need for the Government to keep its spending under control.
Greater household saving contributed to the lower tax take. Mr English says that is what the economy needs in the long-term as New Zealand builds its future on savings, investment and exports.
The Treasury says the lower-than-forecast tax take reflects the economy is recovering more slowly than expected from the recession.
As well, the Treasury has included in the figures costs associated with the Canterbury earthquake which have pushed spending up.
The Government debt and the cash deficit were also higher than forecast in the Budget in May.