BNZ head of research Stephen Toplis said government debt levels were less important if it was taken on for quality infrastructure projects, but he said universal free university fees was "questionable".

A slowing economy and "high expectations" from voters for spending means the Government is likely to miss its central debt target, a top economist is warning.

Stephen Toplis, head of research at BNZ, said on Tuesday that the Labour-led Government should focus more on the quality of its spending, predicting it would soon become clear it would not meet targets it put in place while in Opposition.

Finance Minister Grant Robertson has committed to reducing net debt to 20 per cent of gross domestic product by 2021, while increasing spending in a number of areas.

The so-called Budget responsibility rules - agreed with the Green Party - have been controversial since they were established and questioned by the National Party in a key pre-election attack by former finance minister Steven Joyce.

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Unions have urged the Government to abandon the rules, while former ANZ economist Cameron Bagrie has argued in recent days that the targets were not likely to be met.

Toplis said the bank had not made formal forecasts of where Government debt was headed, but warned it was "intuitive" that the pressures were pushing the Crown's balance sheet in the wrong direction.

KEVIN STENT/STUFF Finance Minister Grant Robertson has described the Government's Budget responsibility rules as its "anchor" and an ambitious target, but there are increasing warnings that they will not be met.

He noted Treasury had already warned that economic growth was slowing, which will inevitably mean tax revenue will be affected.

"We know that the electorate has incredibly high expectations for the Government to rescue them, and the pressure is going to be on them left right and centre to end up spending a bit more than forecast," Toplis said.

"So if your revenue's down just a smidgen and your expenses up just a smidgen, that can have quite a big impact on your bottom line."

Toplis said that he was not arguing for the Government not to spend more money, with certain types of spending likely to benefit the economy longer term, and in that context it would not matter if the ratio of debt rose above 20 per cent of GDP.

"There's too much focus on the debt target. What is far more important, the focus should be on the quality of the spending and the quality of the revenue for that matter," Toplis said.

"Any business knows that if you can borrow to invest and you get a greater return on your investment than the cost of the debt, you do it. Banks will led to that. That's not the issue. The debt ratios in an economy that needs lot of infrastructure and can show that the infrastructure will provide good returns, it's fine if the debt ratio goes up for those reasons.

ROBERT KITCHIN/STUFF Secretary of the Treasury Gabriel Makhlouf speaks during the half year update in December. Treasury's forecasts have pointed to strong economic growth in the coming years, but a week ago it warned that a cooling housing market and weak economic growth meant the forecasts were at risk.

"But if your debt ratio is going up because of questionable spending" the debt ratio does matter.

"Labour Governments like universality in its policies, but isn't it a little bit questionable that I will be able to send my kids to university for free, given my ability to pay for it?"

Toplis said he supported paying for people to go to university "when they need support", but not simply because it was a political promise.

"It's quality, this is like an investment. Don't just invest in areas because you said you would, because that's dumb investment."

When Treasury released a warning that a cooling housing market and low business confidence could cut growth and could put its Budget forecasts at risk, Prime Minister Jacinda Ardern rules out relaxing the Budget responsibility rules.

"The rules stay," she said.

Before the election National warned there was an $11.7 billion dollar "hole" in Labour's fiscal plan, a move which saw it widely attacked.

The claim appeared to be mischief, with Joyce admitting at the time that it was possible that there was no hole - while insisting repeatedly that his claim was correct - but that if there was no hole it showed Labour was signalling spending restraint which was unrealistic.

Following the election, Treasury revised up its growth forecasts in December, then again in May, appearing to clear the way for Labour to increase spending while also reducing debt.

Economists have consistently warned that the Treasury's forecasts were too optimistic.

Three days after Treasury warned it may cut its forecasts, the Reserve Bank cut its own forecasts, admitting growth had cooled.