Finance Minister Bill English is indicating there is significant uncertainty about how the impacts of ongoing low inflation might play out for the economy.

He said deflation is a potential threat and we haven't had it in our economy the way other economies have experienced it, such as Japan and Europe

He said this is part of the puzzle, and no-one really quite knows what's around the corner.

"We're not pretending we know exactly how it's going to play out, what we do know is that where we all expect inflation to be starting to rise by now after the GFC, it hasn't. If anything it seems to be going lower."

English is all but ruling out a change to the way the Reserve Bank targets inflation with the Official Cash Rate

With inflation at record lows, there have been calls in financial quarters for the Reserve Bank's Target Policy Agreement with the Government to be amended to focus on core inflation, instead of CPI inflation.

But Finance Minister Bill English sees no need to rewrite the Target Policy Agreement, but do expect the issue to be debated.

"The whole framework was devised to bring inflation down, noone ever thought it would be used to try and lift inflation."

"Central banks who have tried to lift inflation have found it pretty difficult."