Mini budget will be released before Christmas - Nicola Willis

The National Party is adamant that it can provide a mini budget by Christmas, despite slow progress in coalition talks.

National has been continuing individual talks with ACT and NZ First, but the trio still has not met as a group.

"We're making progress each day, we're obviously getting to the nub end of the negotiation and we're all conscious that New Zealanders want a government up and running," National Party deputy leader Nicola Willis told First Up.

Willis said National first needed to get agreement with each of the smaller parties about the terms on which it would work with them before they could move forward together.

There were areas of disagreement and agreement but ACT and NZ First accepted that tax was a big part of what the government needed to be about, she said.

"We are intending to deliver on tax reduction, we set out our ideal for how that should be achieved before the election."

A mini budget would be ready for the holidays, she said.

"I've always put emphasis on the word 'mini' because we're not talking about a Budget in the sense of the one that you get in May but more an opening of the books done with the half year economic and fiscal update to see the true state of the New Zealand economy and the government's finances."

This needed to be done before Budget, she said.

"And then as an incoming government we need to respond to that set of challenges by making clear our legislative and policy priorities and you'll see as introduce legislation before Christmas to respond to our economic situation to get the economy growing again, to deal with the cost of living, to ensure that we're delivering more money into New Zealander's back pocket.

"We will get on with the job but don't expect the full pony show like we do in May."

National's plan to fund tax cuts through a tax on foreign home buyers is proving to be a major sticking point in coalition negotiations.

NZ First voted for the foreign buyers ban while in coalition with Labour and is flatly opposed to partially rolling it back.

That was a big problem for National, which plans to pay for tax cuts with the billions the party says the tax will raise.

Former Reserve Bank economist Michael Reddell was critical of National's tax plan heading into the election.

Asked if it was ditched, how easy it would be to fill a $740 million hole in its Budget, Reddell told Morning Report the numbers were material but DID not dominate the whole story.

It would not be too hard for National to rephrase some of their promises, he said.

"Even if they push back the income tax cuts by three months, that'll save them $500 million, they could delay the child care subsidies they were promising or the reintroduction of interest deductibility."

This could get them over the next 12 to 18 months, he said.

"Beyond that, you sort of get into the overall question of how are we going to get from here back to surplus. It was always going to be challenging, even if the foreign buyers tax was on the table."