KEY POINTS:
Finance Minister Bill English said while the recession was hurting New Zealanders they were resilient and not paralysed by fear.
"You get the sense right across the board in New Zealand that people are pretty resilient around this recession," he told reporters.
"Where 20 years ago they might
have been paralysed by the prospect of a economic downturn we are talking to businesses, to people on the shop floor, to civil servants - who are rolling up their sleeves ready to do what needs to be done."
Today the Reserve Bank cut the Official Cash Rate (OCR) by 150 basis points to 3.5 per cent - its lowest level since it was introduced at 4.5 per cent in 1999 - as it tried to stimulate the economy.
Mr English and others called on banks to pass on the cuts and most of the banks announced reduced mortgage rates today.
Also today the Government's accounts showed deterioration in the five months to November 30, while statistics showed New Zealand posted a trade deficit of $347 million in December, bringing the total trade deficit for 2008 to $5.6 billion.
Mr English said households would benefit from the fiscal stimulus from last year's budget, tax cuts, lower petrol and lower interest rates.
He was asked if the country could move into depression.
"We're in a much better position than a number of other countries like the UK, US and Japan who are going to see their economies contract fairly markedly. But I think we are some way from the use of the D word."
Labour leader Phil Goff has accused the Government of not doing enough to tackle the financial crisis and expected a spike in unemployment.
Labour wanted more fiscal stimulus such a $1 billion programme to insulate homes.
"It does look like the rest of the world is moving forward rapidly ... we're stuck in neutral in New Zealand," Mr Goff said.
Mr English said the Government planned a series of announcements, starting with a speech from Prime Minister John Key next week.
"We want to stay focused on protecting people from the sharpest edges of that recession ... and on getting on with getting ready for recovery with measures that are going to lift our productivity and our growth prospects."
Mr English said the Government had to be careful not to take on too much debt.
The Government's financial statements released today for the five months to November 30 showed a $5.7 billion deficit - $7.1 billion worse than forecast.
The y showed the New Zealand Superannuation Fund was the major contributor with unrealised losses of $4.2b.
Other contributing factors were unrealised losses of $600m and $300m on ACC and EQC's (Earthquake Commission) portfolios respectively.
Mr English said tax was down and there were big investment losses, but the government investments were long-term.
"We will ride through that."
- NZPA