The Labour Party has ruled out raising the top personal tax rate if it gets into power.

Labour leader Jacinda Ardern also said today that her party would not not ask a planned tax working group to consider any changes to income tax.

"We are not campaigning on an increase in taxes for personal income, and it is not part of our plans," she told reporters at Parliament.

Labour had not proposed a tax hike, but it wanted to see the state of the Government's books today before making a final decision.

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Ardern said her party remained committed to its policy agenda despite the lower than forecast growth and surpluses - as revealed in Treasury's pre-election fiscal update (PREFU) today.

"There was some anticipation that it would be better, but that does not interrupt our plan," she said.

"We've looked at the books and what's available now and we believe we can deliver on what our policy intentions are with what is available."

Finance spokesman Grant Robertson said Labour could remain committed to its spending plan by scrapping National's $2 billion tax cuts, bringing down debt two years later than National, and carrying out a different policy agenda.

He said the fiscal update showed the Government was just "drifting along" and depending on population growth to fuel the economy.

"We see here a reduction in GDP forecasts, GPD per capita is still very low, productivity is virtually flat. Wages this year will not keep up with the cost of living."

Labour will release a new fiscal plan next week to elaborate on its spending. That is expected to include a tax on tourists. The party has already confirmed a tax on freshwater.

"CASH WILL BE TIGHT"

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Earlier today, the Treasury's pre-election update showed that the amount of tax being collected was greater than forecast in the May Budget, but economic growth and budget surpluses were lower than predicted.

That meant the Government that comes into power in September will have more cash to spend than forecast in its first year, but that improved financial situation would not last in following years.

Speaking after Treasury's update today, Finance Minister Steven Joyce said spare cash would be "tight" until 2020.

Tax cuts worth $2 billion were announced in the Budget and will come into force next year.

Joyce said a second tax package was not be possible until 2020-21 unless economic conditions were "significantly better".

He said this was in line with his expectations.

A National government would not compromise on debt targets or public service commitments to provide a second tax break, he said.

"We are not interested in borrowing additional money to pay for another Family Income Package.

"There is very limited room for additional expenditure of any type until then."

The size and scope of any tax package would be decided at the time.

The Treasury's update showed that in the short-term, the Government that takes office after September 23 will have $3.7 billion to spend in 2017/18 - more than the $1.6b forecast in the Budget. This was mostly driven by a higher tax take.

There will be $2.9b available the following year, similar to forecasts, but less than predicted in following years.

That could limit what political parties are able to promise during the election campaign.

New Zealand's economy grew 2.8 per cent in the 2016/17 year, slightly lower than predicted in the Budget. Growth will rise to 3.7 per cent by mid-2019 before falling to 2.3 per cent in 2020/21 - 0.2 per cent lower than forecast in the Budget.

This growth would lead to 216,000 more jobs by 2021 and a $6500 rise in the average wage over the same period.

Unemployment would fall to 4.3 per cent by June 2020.

After 2019, economic growth would be slower than predicted, partly because of slower population growth.

Net debt is $2b lower than forecast for the 2020/21 year. It is set to fall below 20 per cent of GDP by 2020/21 - in line with the National-led Government's target.

Treasury also revealed that investment in residential property had fallen in the year to March because of higher mortgage rates, tighter lending rules for banks, and higher construction costs.

However, this could pick up again because interest rates were still relatively low and the population was forecast to grow.

Joyce said today that the Government was not planning any further policies for first-home buyers. It has already introduced Kiwisaver grants worth up to $20,000 for a couple on a modest income.

Net immigration is expected to stay at above 70,000 to the rest of the year, before falling to 20,000 by 2021.

KEY POINTS:

• economic growth 0.2 per cent lower than forecast to 2020/21.

• residual cash higher than forecast in 2017/18, but the same or lower than forecast out to 2021/22.

• tax revenue higher than forecast.

• investment in property has fallen, could pick up again because of population growth and low interest rates.

• immigration will stay above 70,000 for 2017, falling to 20,000 in 2021.