The New Zealand government has scrapped more than $7 billion of Labour projects and plans, including cheaper childcare, as it undertakes a "fiscal repair job".
On Wednesday, Finance Minister Nicola Willis handed down a mini-budget alongside Treasury's half-yearly economic and fiscal update (HYEFU).
Treasury's forecasts show a wobbly and worsening Kiwi economy which will rely on sky-high migration to grow over the next two years, with GDP per capita sliding backwards.
Ms Willis said HYEFU showed a "shrinking surplus, bigger borrowing requirements and greater fiscal risks" than the last update.
"It lays bare the extent of Labour's economic and fiscal vandalism," she said.
"Labour inherited a growing economy, low government debt and surpluses into the future.
"Six years later, New Zealand is grappling with a toxic trio of high and sticky inflation, high interest rates and reduced economic output."
The true state of both the government books and New Zealand's economy is worse than outlined, given HYEFU was finalised a month ago and does not include new GDP figures out last week showing slumping growth.
The coalition, comprising the centre-right National, free-marketers ACT and populist NZ First parties, all campaigned on reducing government spending, and the mini-budget begins that task.
Ms Willis has banked $NZ7.5 billion ($A7 billion) in savings across the forward estimates, with almost half coming from two changes: dropping tax deductibility for commercial buildings, and Labour's key budget promise this year, cheaper childcare for two-year-olds.
For that, the government will bank $NZ1.2 billion ($A1.1 billion), though it will give some of that back if it introduces its own means-tested childcare tax rebate, an election pledge, at next year's budget.
The government has also made good on a range of other campaign pledges; stopping a pumped hydro project, industrial relations reform, an income insurance scheme, rebates for electric and hybrid vehicles, and planning reforms, all producing multi-million dollar returns.
The mini-budget also returns $NZ2 billion ($A1.9 billion) Labour set aside for climate projects.
While Ms Willis has ordered $NZ1 billion ($A930 million) in public sector savings each year, she denied running an austerity regime.
"We're doing the opposite, we're taking the responsible steps to protect frontline services and we're going to put more money in people's bank accounts," she said.
Former Finance Minister Grant Robertson defended his legacy, saying Ms Willis had constructed a "fictional narrative".
"The facts are that the New Zealand economy is around 7 per cent larger than before COVID, unemployment has been at record lows, wages are rising and our debt levels are lower than most," he said.
The mini-budget does not include National's signature election promise of income tax relief, which will be introduced in next year's budget.
The Treasury forecasts show New Zealand's pathway to post-pandemic prosperity is still a ways away.
High interest rates will persist, driving "a sustained period of soft economic growth" to average just 1.5 per cent in each of the next two years.
"Strong net migration and the ongoing recovery in international tourism are expected to provide some offsetting stimulus to parts of the economy, but the overall picture is one of slow growth," the update read.
Treasury sees a return to a surplus in 2027, just as Labour had promised, but a smaller $NZ140 million ($A130 million) figure rather than $NZ2.1 billion ($A1.9 billion) as forecast in September.
Ms Willis said she remained determined to get back in the black by 2026, in time for the next election.
"I am underscoring today how challenging that will be," she said.
