Economics: It's safe to assume that, even if it's not the overriding issue in the coming general election, the economy will be an important battleground. That being the case, the current Government parties seem set to enjoy a distinct advantage.

Provided the economy does not move unexpectedly into recession in the meantime, Fianna Fáil and the PDs will claim to have been responsible for a decade of uninterrupted and unprecedented prosperity and will campaign on the basis that putting them back into government offers the best chance that the good times will continue to roll. Not an easy message for the opposition parties to counter.

For Fine Gael and Labour, an area of particular vulnerability is taxation. Favouring low taxes has probably become a sine qua non of electoral success in post-Celtic Tiger Ireland. This is because low taxes are widely perceived to have been a critical ingredient in Ireland's recent economic success.

There are grounds for challenging this perception, at least in its more extreme forms, but they are not the grounds on which to base a winning electoral strategy.

Election campaigns do not lend themselves to debates about causation in economics. It seems therefore that Fine Gael and Labour must articulate a strong commitment to keep taxes low.

It will be a challenge to make such a commitment credible, however, because Labour and, by extension, Fine Gael in government with Labour, are seen as disposed to raising taxes. Quite why this is so says something interesting about the collective memory of the Irish electorate.

The last time Fine Gael and Labour were in government together, from 1994 to 1997, the overall tax burden (the ratio of tax revenue, including pay-related social insurance levies, to gross national product (GNP)) fell from 38.7 per cent to 34.8 per cent, or by 1.3 percentage points per year. Remarkably, in the light of popular perception, the tax burden has declined only marginally after nine years of FF/PD government: this year it will be no more than 1 percentage point lower than when the Rainbow Coalition left office.

What empirical support exists for the reputation of Fine Gael and Labour as tax-raising parties derives from their period in office during the mid-1980s, when they resorted to tax hikes in a doomed attempt to correct the massive public finance imbalances of that time. That it is this episode rather than their more recent period in power that dominates the public's perception of their position on tax (and other economic issues) is testimony to how completely Fianna Fáil and the PDs have harvested the credit for the Celtic Tiger.

But correcting the record in this regard is unlikely to be a fruitful electoral tactic: just as election campaigns are poor platforms for exploring alternative economic theories, neither are they well suited to resolving arguments requiring intensive use of economic data.

Is there nothing that Fine Gael and Labour can do to slay their tax albatross? Well, yes there is. It starts with the inescapable connection between taxation and public expenditure.

Simply put: the tax burden is determined by the level of government spending. The higher the latter, the higher the former; the more effective the controls that are placed on the latter, the better the prospect that the former will be maintained at a low level.

What Fine Gael and Labour must do therefore is convince the electorate that under their stewardship, public spending will be better controlled and will grow less rapidly than under an FF-PD government.

Looked at it this way, the challenge becomes a lot more tractable. The current combination of government parties has an unimpressive record of expenditure control. Since 1997, the most meaningful measure of government current spending (Gross Current Supply Services Spending, to give it its full unexpurgated title) has registered an average annual increase of 11.2 per cent in nominal terms, or 7.6 per cent in real terms.

Under the 1994-97 Fine Gael-Labour coalition, the equivalent rates of increase were just 6.8 per cent in nominal terms and 4.8 per cent in real terms.

At another level of abstraction, a number of seriously wasteful public spending projects has come to light under the present administration (of which the e-voting and PPARS debacles are obvious examples) and achieved a high degree of notoriety.

It is also in the area of public expenditure control that, in this writer's opinion at least, Fine Gael and Labour have made their most impressive contribution to public policy discussion.

Their joint document, The Buck Stops Here, published earlier this year, is a good exercise in joined-up thinking about the management and control of public spending and contains a raft of proposals that, if implemented, would greatly improve value for money for taxpayers.

So, Fine Gael and Labour have two weapons at their disposal for winning the battle on public spending and, by extension, taxation: the current Government's record and a fine policy document.

They should add one more: a commitment to limit the annual rate of increase in government current spending.

As an economist, I favour adopting such limits because of the discipline they impart to budget negotiations and the incentive to enhance productivity that they provide. But, committing to a spending limit would also have enormous political value in an electoral context, not least for parties that have a problem with how they're perceived on taxation.

What would be a reasonable value at which to set such a limit? Well, I don't have a religious commitment to any particular figure, but something close to the expected rate of nominal GNP growth would be a good starting point.

Looking over the term of the next government, that would imply a figure in the 7-8 per cent a year range and would, I daresay, be consistent with a significant enhancement in the range and quality of public services if the proposals in The Buck Stops Here were implemented.

It would also be appreciably lower than the rate at which spending has been increased by the current government. On that account, it would be at least as credible as anything Fianna Fáil and the PDs could commit to and would decisively address the FG-Labour vulnerability on tax.

• Jim O'Leary lectures in economics at NUI-Maynooth (jim.oleary@nuim.ie). He was an adviser to the Fine Gael team that negotiated the formation of the 1994 to 1997 government