The government is taking "a good hard look" at options put up by NZ Post, which include cutting the number of days it delivers mail, Finance Minister Bill English says.

NZ Post chairman Michael Cullen has written to State Owned Enterprises Minister Tony Ryall, saying steps to make "fundamental changes to our operational models" must be taken this year.

"The business has reached the point where it can no longer just cut costs and rely on new product offerings to match falling volumes," he said in the letter, released to NZ Newswire.

"It is now clear to the board that the majority of short-term fixes have been exhausted."

Dr Cullen says mail volumes were falling 5 per cent year-on-year, and in the six months to December 2011 they fell 7 per cent.

NZ Post is understood to be seeking capital from the government for Kiwibank, but much of Dr Cullen's comments about its subsidiary were blanked out in the letter.

Mr English says NZ Post has spent the last 18 months considering the future shape of both of them.

"We're the owner of these businesses, Kiwibank is growing fast and NZ Post is shrinking," he told reporters on Thursday.

"We need to end up with stable businesses that deliver value for taxpayers."

Mr English says he won't speculate on what decisions will be reached.