Prime Minister John Key has warned of increasingly dire economic forecasts ahead of the opening of Parliament tomorrow.
And news of 200 fresh redundancies at ANZ National has magnified the scale of the economic crisis.
Mr Key said yesterday it was important not to overreact. But "nor should we underestimate the challenge we are facing", he said on TVNZ's Agenda.
He said the Governor-General's Speech from the Throne would set out the new Government's agenda for the next three years and would focus on the economy, law and order, health and education.
Parliament would then go into urgency to pass some of the legislation in National's 100-day plan. The Cabinet was expected to sign off the legislation today, including the tax cuts, changes to KiwiSaver, bail laws, and National's promise to fund Herceptin for a 12-month course. Mr Key defended the decision to use urgency to pass the laws, saying National had campaigned on a 100-day agenda "and you're going to see us act and act pretty quickly".
He said it was too early to predict whether the worst was over, despite the Reserve Bank noting New Zealand was technically out of recession.
The ANZ National redundancies were evidence of the crisis flowing down into the economy and indicated the pre-Christmas opening of the books was expected to show a worsening of forecast debt levels, rising unemployment and larger deficits.
A preliminary Treasury update for the Government predicted unemployment to reach 5.7 per cent by March 2010 and deficits to reach $9 billion by 2013 - $1.7 billion more than the pre-election fiscal update.