Prime Minister John Key says there is 'light at the end of tunnel' after half-yearly accounts painted a better picture than the Budget. Finance Minister Bill English said New Zealand had gone through the worst, and was on the road to recovery.

The world had come through the recession a little better than expected, 'and New Zealand a lot better'.

'My message to New Zealanders is that I think they can feel a bit more confident as they go into Christmas that their jobs will be retained and that they will have a stronger economy when they come back in 2010'.

The brighter outlook is based on the fact that big trading partners, Australia and China in particular, have withstood the recession.

The Government's priority was going to be getting conditions that encouraged businesses to employ extra people.