The government has again cut its operating allowance for the Budget - with the Prime Minister saying more spending during a fuel crisis will risk leaving New Zealand more exposed.

The operating allowance was originally set at $2.4 billion - but Christopher Luxon told a Business NZ audience in Auckland this afternoon it will be $2.1b.

The capital allowance will increase to $5.7b.

Luxon said the government would continue to invest in essential services, but has also been able to find significant savings.

Finance Minister Nicola Willis will deliver her third Budget on May 28 in what are constrained fiscal times.

The conflict in Iran and the global fuel crisis it has triggered required a certain level of re-forecasting and reprioritising of the Budget in recent months.

There were no pre-Budget announcements expected in Luxon's speech, though some are due to trickle out from other ministers in coming days.

The only policy announced to date is the scrapping of the third year of fees-free tertiary study.