The economy is unlikely to grow this financial year because of the earthquake, says Finance Minister Bill English.
Treasury's early estimate is that the total economic impact of the quake will be between $10 billion and $15 billion, with the direct cost to the Government of between $2 billion and $3 billion.
Mr English says it is now likely that economic growth for the 12 months to June will be close to zero.
He says the Government is beginning to reshape the May budget to take those costs into account, but says no decisions have been made.
The Government is not planning a slash-and-burn exercise, he says, but it will have to go back and change its priorities.