The Taoiseach rounded on the Labour party, claiming that its "price tag" in power would be €33 billion, writes Michael O'Regan.
"Labour would have increased the national debt by 51 per cent at least," he declared. "Labour would have increased PRSI and imposed job-killing taxes. Labour would have punished enterprise and doubled capital gains tax from 20 per cent to 40 per cent."
He accused Labour of planning to raid the pension reserve fund which was being set aside to secure decent pensions in the future.
"Labour would have re-mortgaged all our futures, just as we had worked so hard to pay down our national debt," said Mr Ahern.
He added that Ireland under Labour was, and would be again, a country of high taxes, high unemployment and high national debt.
Replying to Labour's Private Member's Motion critical of the Government's first year of its second term, Mr Ahern accused the party of losing touch with the reality of government.
"They have forgotten that good government is tempered by a healthy respect for economic reality," he added. "They choose to overlook that effective government is about matching plans with resources."
Amid heckling from the Labour benches, Mr Ahern defended the Government's record, adding that it had the courage to change its policies with circumstances.
"We will not run an economy in 2003 with growth of 3.5 per cent on the same basis as we ran an economy in 2001 with growth of 11 per cent," he added.
Uncertainty abroad inevitably impacted on a globalised economy like Ireland's, he said.
"Indeed, a downturn in Germany has twice the impact on the Irish economy as on the rest of the EU on average," he added.
"When we had more money, we spent more money. Now what we have less, we are spending less. That is the right policy and it is the policy we will continue."
Mr Ahern said that while he knew there was frustration that the unprecedented pace of increase in public spending had to be moderated, it was not the time to give up. Neither was it the time to be panicked into rash responses.
The Tánaiste, Ms Harney, said that political commitments made by her party were based on economic assumptions.
The PD election manifesto was based on the belief that the Irish economy would grow at an average rate of five per cent in real terms up to 2007. Other major parties had made broadly similar assumptions about the national economy.
"Things have not worked out like that and the Coalition has faced a very tough international climate during its first 12 months in office," she added.
Ms Harney said the Government had an economic strategy which had delivered full employment. "We have an economic strategy that works. And we are going to stick with that winning strategy over the next four years," she added.