IRELAND must grasp the opportunity to halve its unemployment level over the next 15 years, according to Forfas, the policy and advisory board for industrial development, science and technology in Ireland.

At the launch of its 15 year strategy document, Shaping our Future: A Strategy for Enterprise in Ireland in the 21st Century, Mr Brian Cogan, manager of enterprise and planning at the board, said the opportunity must not be missed.

"This is the first time we have had an opportunity to seriously reduce unemployment. Changing demographics, high growth and the chance of 20,000 new jobs a year are presenting a once in a lifetime chance.

Adopting the right framework could enable Ireland to halve its unemployment rate to around 6 per cent and raise Irish living standards to the EU average.

The document sets three basic targets for its 15 year strategy:

. Reduce unemployment from 12 per cent to 6 per cent;

. Increase living standards to the EU average;

. Ensure a good quality of life.

To achieve these targets the 303 page document makes a host of specific proposals covering areas from unemployment to education and social welfare to taxation. In the most detailed and comprehensive economic strategy document since the Culliton report, it also looks in detail at what needs to be done to encourage the three main sectors of industry services, Irish owned industry and inward investment.

Forfas says that employment needs to increase by 20,000 a year on average; about what has been achieved over the last five years of record growth and considerably below last year's record 53,000 increase. It believes that the bulk of new jobs will be in the services sector. Internationally traded services can almost treble in size, creating 58,000 new jobs over the 15 years to bring total employment in the sector to 80,000. The biggest job creators will be domestic services and tourism, where Forfas expects 261,000 jobs over 15 years, bringing total employment in this sector close to one million. Manufacturing is seen as a major creator of the wealth which will create jobs throughout the economy, but itself is expected to create just 45,000 extra jobs, bringing the total to 280,000.

To encourage competitiveness, the report says that overall taxation should be reduced from 40 per cent of GNP to 35 per cent. PRSI should also be cut to reflect comparative British rates.

Corporation tax for services should be reduced toward the 10 per cent rate presently enjoyed by the manufacturing sector. At the moment the main services rate is 38 per cent and the 10 per cent rate is due to be phased out by 2010.

The report identifies high tax on low income as a problem. By 2010, 80 per cent of all taxable personal income should be liable at the standard 25 per cent rate, with remaining income taxable at 40 per cent. To encourage risk taking, it says capital gains tax should be reduced to the standard rate, now 27 per cent.

The report says the tax base should be widened and remaining tax reliefs and incentives be reduced to standard rate. The VAT base should be extended to include a broader range of goods and services, it added. Controversially, the report says property taxes should be increased in line with ability to pay and the level of local services.

The report examines the relationship between high taxation and social welfare payments and how these issues militate against job creation. The need to increase the incentive to work, especially among parents, is stressed. The current child dependant allowances for the unemployed should be replaced by a universal child benefit system paid to working unemployed families. Higher earners would be taxed on the benefit.

Among specific proposals, the report states that schools need an increased emphasis on language teaching with less overall domination by French. Educational resources should also be reallocated towards those most at risk of leaving school without qualifications. A new approach to vocational training is also recommended.

Looking at services, the report calls for a much greater emphasis on supporting job creation in this sector. Ireland can develop leadership in telecommunications based services, it says, and become a hub for corporate service centres across Europe.

Irish owned firms are also an important area to target, according to Forfas. The report proposes a drive to direct Irish industry into high growth sectors. This will require a much greater emphasis on innovation.