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National has dumped its pre-election promise to help New Zealand ride out the tough times with ongoing tax cuts because the financial outlook is so dire.
So what does it all mean for New Zealanders own budgeting at home?
ONE News spoke to a family of four to see if they would be making their own cutbacks.
The Case family can still afford nice quality coffee and a good solid start to the day with bacon and eggs - but they are considering tightening their belts now.
"$20 is going to hurt some families, we are not in that position but if it affecting our trust and maybe some of our future as far as putting some of our money aside," says Simon.
They will be cutting back where it can, like on treats and outings for the kids.
"You want to be able to trust who is in leadership, that they are not just going to change things willy, nilly," says Nicky.
Workers on $50,000 banked an extra $18 a week in tax cuts in April, they were due to collect another $12 over the next two years, but that has now been cancelled.
Workers on $100,000 banked an extra $24 a week in April, that was supposed to rise over two years by another $17. That has also been canned.
"Its about integrity at the end of the day, you say you're going to do something, you need to do it," says Scott.
The government says if it hadn't made brutal cuts, its debt levels could have reached the equivalent of $180,000 for a family of four like this one.
Its shaving $2 billion off its own spending on foreign aid, conservation, is dumping adult education courses and plans to reduce the size of pre-school classes.
Nicky and Scott are not just thinking about their immediate needs they are looking ahead to how they will afford to support themselves in their twilight years.
The concerned government is dumping its annual $2 billion contribution to the super fund for at least a decade because it would have had to borrow $30 million a week to fund it.
