GIVEN the combination of political, fiscal and banking crises we face today, it is only to be expected that the major alternative budgetary proposals by the country's largest political parties -- Fine Gael and Labour -- should receive much scrutiny in days ahead.

It is worth taking a bird's-eye view of the core ideas behind the two proposals.

In a welcome departure from the Government's own plans, Fine Gael is seeking to push more of the fiscal adjustment on the side of achieving greater efficiencies in public-sector operations.

Labour is, as usual, strong on rhetoric in this area, but weak on any details.

The Government has pencilled in a number of draconian tax hikes -- in income tax and VAT. The total burden of taxation carried by households -- the very core of Irish economy -- rose from 62.5pc in 2008 to 68.6pc in 2009 to 72.3pc in 2010 to date.

Hiking taxes on already financially stretched households, as the current Government is clearly hell-bent on doing, will be both counterproductive to the cause of raising additional revenue and disastrous to future economic growth.

Fine Gael seems to realise this simple reality of economics by abstaining from the need to raise tax rates. This is a welcome step in the right direction. In contrast, Labour is clearly unable to divorce itself from the traditional agenda of 'soaking the rich'. The party proposes to introduce a 48pc tax band for those earning more than €100,000 per annum.

The core premise behind this is the erroneous belief that all people earning higher salaries are not productive enough to warrant such earnings. Of course, this is true for quite a few executives in our public sector, banks and state-protected sectors.

But this is a disastrous way of dealing with those who, through extensive investment in their skills, knowledge and aptitude, have achieved internationally marketable careers.

If anything, Ireland needs to focus on reducing the income and employment tax burden to stimulate investment in skills and knowledge, and to attract world-class entrepreneurs who can create jobs for higher quality employees. Like it or not, we need people to drive growth, hold advanced degrees and/or invest aggressively in their abilities and aptitude.

They expect to get paid for that without having to surrender some 60pc of their skills-earned premium to income tax, levies and other taxes.

The two parties also differ on what to do with our bloated public sector. Fine Gael is calling for 18,000 more redundancies than the Government. Labour is aiming for at least 5,000 fewer reductions than the Programme for Recovery 2011-2014.

Putting aside both parties' claims to the immediate budgetary savings, longer-term reforms in the public sector will require larger cuts in order to bring about efficiencies to the levels achieved in other small, open economies. Thus, Fine Gael is at least ahead of both Labour and the Government on the matter.

Labour proposals suggest the party thinks of the current fiscal crisis as a temporary phenomenon -- bound to be resolved by growth and unlikely to have a lasting damaging effect on the Irish economy. Hence, the party proposes to deliver only €4.5bn in cuts in 2011.

In contrast, Fine Gael recognises that the pre-announced multi-annual target of €15bn will alter decisions today and for years ahead. In this environment, front-loading cuts is more productive than taking a 'slow-go' approach.

All in all, then, the high-level view paints a picture of Fine Gael's plans as being more realistic and more supportive of future economic growth than those of Labour.

Now, if only both could face the electorate . . .

Dr Constantin Gurdgiev is adjunct lecturer in finance with Trinity College, Dublin

Irish Independent