English: 'We're not great but we're not Greek'

As politicians continue to debate the budget under urgency in Parliament government ministers have hit the road to win support for the changes and Finance Minister Bill English says not to worry about the super-rich.

Yesterday's budget saw across the board income tax cuts and a rise in goods and services tax to 15%.

Opponents have called it a budget for the rich.

But the Government said it was the biggest tax shake-up in 25 years and was about rebalancing the economy by shifting from spending to a focus on saving and investment.

In Wellington today Mr English told economists and business leaders at a post-budget breakfast the Government wanted a "tilting" of the economy with incentive for skilled people to stay in New Zealand and everyone to increase their savings.

"There's no lolly scramble here, we're just working to sound principles of a broad tax base.

"You can't run an economy worrying about the 2 or 3 percent of people who earn too much."

If you wanted to worry about top income earners you would make a law saying no one could earn over $100,000, Mr English said.

How the budget would affect the majority of taxpayers "matters much more than how much (Telecom chief executive) Paul Reynolds makes -- he'll be paying a bit less but he'll still be paying a lot".

The tax cuts were about offsetting the increase in GST, not other increases in the cost of living, such as the emissions trading scheme, he said.

Mr English also said he did not think inflation would be as bad as some were predicting because retailers would not be able to pass on the GST increase immediately.

The Government believed the budget set New Zealand up to lead the international recovery after the recession.

"We're not great but we're not Greek ... we're okay, we're not UK," Mr English said.

"I think people are quite realistic, they're going through an adjustment in their own personal circumstances, often paying down debt, watching their expenditure, concerned about their job security and those are the same issues for the economy. So I think the budget fits in with how people are seeing the world."

Those in the public sector may be more concerned with job security after the Government told sector bosses not to expect more money in the next budget either.

Mr English said there would be an "ongoing reduction" in public service jobs. More than 1500 jobs were lost last year.

Most public services did not get more money this year and have been told not to expect any next year, he said.

"It's up to the chief executives to plan ahead assuming flat revenue but obviously they're going to have rising costs... and they need work out how to deliver frontline public services."

Mr English said this did not break National's election promise to cap, but not cut, public services because they were still growing the sector.

"We're continually growing the volume of public services but we've got to deliver those services without much extra money."

It was up to each department to decide how to do that, he said.

"The term cuts is used in a pretty emotional and lose manner."

Prime Minister John Key will give a pre-budget speech in Auckland at lunchtime and Social Development Minister Paula Bennett spoke to her ministry this morning.