Labour is relying on "dividends not lost through asset sales" to offset most of the revenue cost of its tax policy.
Over the first four full years its planned tax changes would reduce the Crown's revenue by a net $1.37 billion by its own estimates.
But it said yesterday that the net revenue impact of its policies over that period would be a reduction of just $250 million.
That is because it is counting as revenue $868 million in dividends not forgone by selling down the State-owned assets the Government plans to float, and $233 million in tax it gains from resuming contributions to the Cullen Fund five years earlier than National would.
On the expenditure side it has booked $1 billion of extra spending over the next four years, largely the result of making KiwiSaver compulsory and retaining the taxpayer subsidy.
That is covered by the Budget's operating allowance for uncommitted spending of $800 million a year, but it does not leave a lot for other measures.
Finance spokesman David Cunliffe said it was a prudent fiscal strategy, written against the backdrop of an uncertain world economy.
"It controls spending through a disciplined programme that will be phased in over time - 2013-14 is the only year in which Labour reports a larger operating deficit than National."
The net cost of the revenue and spending plans over the four years to June 2016 is $1.3 billion.
Beyond that, Labour says, its policy becomes fiscally positive as revenues from capital gains build and the dividend flow from SOEs continues undiluted.
One of the new sources of tax revenue Labour is relying on would come from "ringfencing" property investors' tax losses.
It is forecast to deliver $265 billion a year of additional revenue indefinitely. Labour cites Treasury advice to the Government when it was preparing last year's Budget as the source of that figure.
If it was based on historical figures which include the property boom of the last decade - when investors were often borrowing heavily in the expectation of capital gains and not too bothered if their cashflows were negative, because they could use the losses to offset taxable income from other sources - then it may be an unreliable guide to the future.
But associate finance spokesman David Parker said he was often bailed up by people currently using losses on such properties to shelter other income and unhappy about the prospect of ceasing to be able to.
Cunliffe said the $265 million a year figure would be close to a long-term average.
Any fluctuations around it would be mitigated by the anti-avoidance measures also planned, he said.
Labour's numbers include a cumulative $620 million over the next four years from that source.
This would be over and above the net $750 million in additional revenue booked in last year's Budget, also over four years, from increased audit and compliance activity.
Cunliffe said the extra revenue represented less than a third of 1 per cent of overall tax revenue.
Its numbers also include $700 million of revenue over the next four years from the inclusion of agriculture in the emissions trading scheme in 2013 and the introduction of auctioning of permits.By Brian Fallow Email Brian