The Government's attempts to bolster the New Zealand economy against recession have been defended by Prime Minister John Key as balanced and effective.

Mr Key yesterday outlined a "Jobs and Growth Plan" intended to make life easier for small to medium sized businesses as a world-wide recession sweeps over New Zealand.

The package focused on tax changes worth $480 million over four years increasing businesses' short term cash flow and reducing compliance measures.

Labour said the small steps were welcome, but were "underwhelming" especially when it followed hard on the heels of the $52 billion package announced by the Australian Prime Minister Kevin Rudd.

Businesses also welcomed the moves saying they would help through the tough times, but there were still calls for more.

Mr Key defended the announcement, saying they were part of an ongoing response to the problems facing the economy.

The Government would soon be announcing the fast-track of building projects along with the already announced personal tax cuts reductions coming into effect from April 1.

"The combined effect of this infrastructure spending, together with tax reductions, will mean that New Zealand will experience a fiscal stimulus amongst the top five in the developed world, when compared on a relative basis," Mr Key said.

Mr Key said a balance had to be struck between reducing pain now and not blowing out the Crown accounts for years to come.

"It is not always about the amount of physical money that you are spending. It is about the ease of doing business ... if you are solely going to measure things on the fiscal cost of them you are missing the point," Mr Key said.

The measures would put $245 million back into the pockets of business this year when they would need it most, he said. The reforms to the Resource Management Act announced yesterday were another example of a non-fiscal measure which would assist business.

There have been calls from some businesses for further cuts to the company tax rate.

Mr Key said this was too expensive at this stage and, even if was affordable, it was not his highest priority.

"If all the sudden we strike a massive oil find and start getting lots of money then my preference would be to lower and flatten ... personal tax."

Mr Key in his speech to the Waitakere Enterprise Business Club was blunt that New Zealand's economic prospects for the next two years were grim.

As an open economy and trading nation New Zealand would suffer from the international recession and the forecasts were "sobering".

However, he believed there was already light at the end of the tunnel.

"I am confident that we will get through these tough times together. The New Zealand economy will recover strongly."