New Zealand remained focused on the target of getting back into surplus in 2014-15, Finance Minister Bill English said from Frankfurt last night after the Government's audited accounts for the last financial year were published yesterday.
He said Government expenditure was under control and needed to stay that way with revenue being more uncertain.
It was clear that New Zealand was a lot better off than many other countries.
"The current outlook is a bit of a challenge but we remain focused on that target," he said.
"To stay on track we need to keep control of the expenditure as we go through a modest adjustment compared to a lot of other countries."
One of the biggest differences with Europe was that New Zealand actually had growth - 2 to 3 per cent - and Britain and Europe were looking at virtually none.
Last week, Mr English visited Britain, which is in the middle of a protracted recession. His counterpart, George Osborne, this week indicated it could take another six years to recover and proposed even greater cuts to the welfare bill.
Mr English said the pair discussed quantitative easing - creating currency - which is now being advocated by the Green Party as appropriate for New Zealand.
"There are big risks with it and it is just barmy to suggest that in an economy growing at all that you would do it," Mr English said.
"It is being done in these other economies to avoid a persistent, deep recession. We're not in that situation."
He rejected claims from Labour and the Greens that New Zealand was in a manufacturing crisis, though he admitted it was "pretty tough".
Manufacturers deserved credit for maintaining jobs at about 250,000 despite four or five years of a relatively high exchange rate.
"We are doing everything we can to create more jobs and make our manufacturers more competitive."
Speaking about the accounts, Labour leader David Shearer said that after four years, New Zealanders "are working harder but going backwards".
National's claim to be a credible manager of the books had been blown out of the water with its operating deficit being $800 million more than it forecast in May.
Q&A: Snapshot of the books Year ended June, 2012
What's the overall position?
The operating deficit, excluding gains and losses, was $9.24 billion, about half of last year's record $18.39 billion deficit because the earthquake costs were less, and more than the $8.44 billion deficit forecast in the Budget.
What if the earthquake expenses were taken out?
The operating deficit for the year just ended would have been $7.3 billion and the year before it would have been $9.3 billion.
What was better than last year?
Tax revenue was up by $3.5 billion and Core Crown expenses fell by $1.4 billion.
What was worse?
The write-down in KiwiRail's value in June was not factored in the May Budget forecasts and affected the operating balance.
What is the debt/ borrowing situation?
Net debt is $50.67 billion, or 24.8 per cent of GDP, slightly less than forecast in May. The Government receives $15.1 billion from issuing domestic market bonds, or $302 million a week.