An exceedingly large undercut of operational funding sought by the Reserve Bank is raising eyebrows

The Government's chopped 25-percent off the billion dollars requested by the bank - for its five year agreement.

Massey University School of Accountancy and Finance head Claire Matthews says when we consider recent Government spending cuts, this one sends a strong message by being so large.

She says it could underestimate the value of the work they do.

Matthews says issues may crop up in the longer term - but that will depend on where they choose to cut and how they re-allocate the funding they're left with.