New reports show the economy is worse off than previously thought and it's sparked debate about what - or who - is to blame.

GDP data shows the economy shrunk 0.9 percent in the June quarter - a more significant dip than the 0.3 percent forecast by the Reserve Bank and similar figures from most economists.

Newstalk ZB political reporter Azaria Howell says economic conservatives are calling for a bigger reduction in spending, while Labour has called for the whole Government to resign.

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