Finance Minister Bill English says new Budget estimates reveal a $1 billion drop in the Government's forecast operating balance.
A worsening financial outlook is forcing the Government to consider further reductions to its spending over the next three years.
Mr English said the revised forecasts indicate a $640 million deficit in 2014-15 compared with the $370 million surplus predicted in the Budget Policy statement in February and this will further restrict government spending.
The minister confirmed on Thursday there will be a near-zero Budget on 24 May as the Government works to reach its target of returning to surplus by 2014-15. He said the Government is determined to get back to surplus that financial year - but it is going to be a bit tighter than expected.
Mr English said the revised estimate is a result of a slower than expected economy and state-owned enterprise profits being lower.
He said the Budget would also propose changes to the Public Finance Act to allow more checks and balances on ministers' spending decisions and their long-term effects. That includes a proposed spending limit to restrict spending increases to the level of population growth and inflation.
Mr English said the Government would continue to look at boosting its income by closing down tax loopholes, as well as cutting operating costs.
The minister admitted it is possible the Government would not reach its surplus goal, but said that is hypothetical and more would be known about the forecasts later this year.
