THE Government is expected to ignore the more radical recommendation of a major economic strategy document due to be published this week by Forfas. The document, Shaping our Future A: Strategy for Enterprise in Ireland in the 21st Century, is understood to recommend policies such as increasing property tax and rolling back some elements of employment protection legislation.
The introduction of taxable child benefit and the abolition of dependent children allowances for the unemployed are recommended.
Implementing such recommendations would present major difficulties for the coalition and they have privately been dismissed as unrealistic by one Government source.
However, some of the report's recommendations are expected to be incorporated into the White Paper on human resources and the strategy paper on enterprise and services, currently being prepared by the Department of Enterprise and Employment.
The report was commissioned by the Minister for Finance, Mr Quinn, two years ago when he held the Enterprise and Employment portfolio. It was to provide the basis for future economic planning and is the first major study by Forfas, which is the umbrella body for economic development.
However, the need for the organisation may now be examined following the decision to disregard many of the recommendations of the report, said the Government source.
The Minister for Enterprise and Employment, Mr Bruton, is understood to be irritated at the leaking of selected elements. "It is reprehensible that the report should be leaked prior to its presentation to the Minister," according to a spokesman for Mr Bruton. Other recommendations unlikely to find favour with the Coalition, include the extension of the VAT base. This implies ending the current zero VAT rate for children's clothing, some medicines and school books.
The report highlights the need to plan for the ending of the 10 per cent tax rate for manufacturing companies in 2010 and the end of the 10 per cent tax holiday for the International Financial Services Centre in 2005. Government sources said yesterday that work on this issue was under way.
It sets a target of bringing the average Irish income up to the European levels by 2010 from its present level of just over 70 per cent. Ii aims to cut unemployment by over half to 6 per cent of the workforce.
A similarly ambitious target of reducing the number of long term unemployed by two thirds to 50,000 is also set.
To achieve this objective the economy will have to create over 20,000 additional jobs each year. Forfas believes that the services sector is capable of creating 300,000 jobs over the next 15 years.
It advocates targeting the telecommunications industries. Tourism is expected to be a major source of service jobs, creating 80,000 over 15 years.
However, manufacturing is expected to show only modest employment growth, with less than 50,000 jobs to be created.
Forfas believes growth in public spending will have to be maintained within 2-5 per cent a year for targets to be met.
It recommends wide ranging changes in the organisation of the public sector and State companies. Specifically, it calls for the sale of Cablelink, the cable TV company controlled by Telecom Eireann.
