Labour leader Johann Lamont has signalled a policy shift by calling for an end to a "something for nothing" culture.
The Scottish party leader said taxes would have to rise or services would be cut to maintain popular but expensive SNP pledges on areas such as the council-tax freeze.
First Minister Alex Salmond is passing the buck to already stretched local governments, she said in a speech in Edinburgh.
"Scotland cannot be the only something for nothing country in the world," she said.
Underlining the rapidly-expanding number of older people and the squeeze on finances, she added: "This is the stark choice that Scotland has to face up to: if we wish to continue some policies as they are then they come with a cost which has to be paid for either through increased taxation, direct charges or cuts elsewhere.
"If we do not confront these hard decisions soon, then the choice will be taken from us when we will be left with little options."
A group will be set up by Labour to look at the economy and a university professor will help provide fully-costed policies, she said.
"I pledge this to the people of Scotland," she added.
"What I will say will not always please you, but what I say will always be honest and true and how I genuinely see it.
"I will not promise what I cannot deliver. And I will never hide the cost of what I propose."