Parties' expected surpluses much the same - but health is a key difference.

Either Steven Joyce or Grant Robertson is likely to be writing the next three Budgets.

One week from the general election, what do we know about how they would differ, given the different policies and spending commitments of National and Labour, and given the same Treasury forecasts of how the economy will fare and how that will flow through into the Government's coffers?

Before heading into the weeds, two caveats are worth noting. One is that all these numbers are subject to forecast error. We have only just had a fiscal year in which the surplus was $2 billion higher than the Treasury had forecast only weeks before the end of the year. But for comparative purposes, the forecast assumptions are the same for both parties.

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Second, both will almost certainly have to negotiate with coalition or support parties. What follows ignores the fiscal costs and complications arising from that.

That said, the striking thing is how similar National's and Labour's Budgets are for the three years to June 2021, in terms of the total fiscal envelope within which their specific spending promises are contained.

Labour's forecast for total Crown operating expenditure over those three years is 2 per cent - or $6.9b - higher than National's.

Over that period Labour expects to have $6.8b more revenue, largely (85 per cent of it) from cancelling National's planned tax cuts scheduled for April next year.

So the two parties are forecasting almost identical surpluses - adding up to $15.7b for National and $15.6b for Labour over the three years.

National would say those surpluses, and the trajectory of declining public debt, testify to its prudent management of public finances. Labour would say the cost of that approach, in underfunding public services, has been too high.

Steven Joyce posing inside the Waterview Tunnel. Photo / File
Steven Joyce posing inside the Waterview Tunnel. Photo / File

Looking forward, where they differ is in how they allocate those virtually identical pots of money.

A key difference is health. If you take Joyce's Budget at face value, National does not intend to increase health spending over the next three years. That spending line is flat.

But that is not what happens, of course. In every Budget health gets the biggest bite out of the new money or previously unallocated operating allowance. In the current year, health spending will be nearly $1b up on last year.

So it is a bit cute for Labour to say it will spend $4.7b more than National on health over the next three Budgets. The difference would almost certainly be a lot smaller than that, but National's non-committal approach makes it impossible to know how much smaller.

Equally, it is a bit silly for National to say, in effect: "We might spend more on health. Might not. Haven't decided yet. But if we do there is plenty there in the kitty".

Altogether over the next three Budgets, Labour has committed to spending $4.7b more on health than National has in the pre-election economic and fiscal update (Prefu), $3.8b more on welfare (mainly in its families package) and $3.7b more on education.

Those three big-ticket items account for $12.2b of the cumulative $14.4b of additional operating spending (over and above the Prefu) it has committed to.

It almost covers that by a $6.8b higher tax take and by scooping $7.1b out of the $10.3b of unallocated operating allowance in the Prefu.

That leaves Labour just $3.2b of uncommitted new money altogether for the next three Budgets for everything but the big-ticket items (health, welfare and education).

Bill English and Joyce say that is unrealistically tight.

It is a fair point, but the rest of that sentence has to be "... if and only if you are determined to run the same hefty surpluses both major parties are forecasting."

There is a lot of give in the fiscal bottom lines of both parties - operating surpluses (excluding gains and losses) which average more than $5b a year over the next three Budgets.

Meanwhile, during the election campaign National has been spending some of the $10.3b cumulative operating allowance the Prefu gives it.

Subsidising GP visits for 600,000 people will cost nearly $300 million over the next three years, increased grants for first home buyers $225m and the extension to paid parental leave a similar amount. In all, National has committed $1.4b of its operating allowance for the next three Budgets, leaving $8.9b in the kitty.

So that is $5.7b more uncommitted spending power than Labour has left, but Labour argues it would take $4.7b of that just to cover inflation in health and education costs.

On the revenue side of the books, Labour is counting on $6.8b more tax over the three Budgets. Most of that - $5.8b - comes from reversing National's "tax cuts" - the income tax threshold changes legislated for next April to adjust for seven years of bracket creep.

It also expects to get $600m more than National does over the three years from cracking down on multinational tax avoidance, taking Inland Revenue at its word that a dollar spent on funding additional compliance activity results in a $7 yield.

The international visitor levy is forecast to bring in $225m over the three years, plus $180m from property investors, from pushing out the bright line test for when capital gains are taxable to five years and from changes to the negative gearing rules.