Tax cuts: Finance Minister Nicola Willis maintains commitment to no extra borrowing

Finance Minister Nicola Willis is sticking to her commitment of no additional borrowing for tax cut, even with some economic forecasts that the government would need to borrow $15 billion extra in the Budget.

"No one can tell you what's going to be in the Budget until the final economic and fiscal forecasts have been published, and not even I have seen them yet," Willis told RNZ's First Up.

"What we can tell you very conclusively is that we're sticking to our commitment, which is that we will not be borrowing additional funding in order to provide tax relief.

"Our tax relief will be fully funded through reprioritising money that would have otherwise been spent on government programmes, and through a couple of targeted revenue measures.

"That means it's fiscally neutral, which means it's responsible. And rather than adding to inflation, will actually take away from inflation, which is what we've always set out to do."

Willis has just returned from a trip to Washington DC, which she said was a reminder of how fortunate New Zealand was.

"There's nothing more sobering than being at a dinner as I was with the Ukrainian Minister of Finance, the Polish Minister of Finance and the French Minister of Finance, in which the words 'military defence' and 'war' came up pretty readily.

"It really made me reflect on how to some extent we take for granted our secure borders and the lack of conflict in our country. And that is a very special thing about New Zealand, which we should hold dear."

It is with that perspective that Willis said the government was looking at the AUKUS deal.

"We're living in a world with a much greater range of threats than we've seen perhaps in more recent decades. And I think that underscores how important it is that we keep those traditional security partnerships there and that we do explore what options we have in the world because Australia, the United States - they remain our good friends from a security perspective.