FAS is proposing to restrict work permits to help the job prospects of the unemployed, writes Arthur Beesley

FÁS projected yesterday that the number of workers in the State would rise by 180,000 in the next five years. It was a highly optimistic forecast, in line with the most recent medium-term growth projection from the Economic and Social Research Institute.

But positive as such an outcome would be, the reality is that the job market is changing rapidly. With the latest Central Statistics Office figures suggesting that the economy is haemorrhaging jobs in the industrial sector, the days of the full employment are over.

FÁS's director general, Mr Rody Molloy, said yesterday that such job losses could be expected as employment shifted to the service sector from industry. The medium-term outlook was quite positive, he said.

However, the fact that FÁS has proposed changes to the work permit regime indicates a degree of concern about conditions in the job market as growth in the years to 2005 slows to 1.5 per cent per annum. Forecasting beyond that point is very difficult indeed.

In this regard, the proposal to restrict work permits to specific skills shortages ranks as just one measure FÁS wants introduced to help stimulate the job prospects of the unemployed.

They include the targeting of tax incentives to encourage female participation in the workforce, of low income groups and a "real increase" in child benefit payments to lessen the disincentives for unemployed parents to enter the workforce. In addition, Mr Molloy called for a shift in emphasis for the provision of State employment programmes towards measures that help participants secure jobs.

In the short term, however, the body's emphasis on the permit question arises because it believes the number of new permits being issued is too high. For the moment, however, the Government appears unconvinced of the need for change. A Department of Enterprise, Trade and Employment spokeswoman said the system was "already very tight".

FÁS has had responsibility since January to assess whether the skills required can be located within the State or the European Economic Area. But the body's labour market review suggested the labour shortage has led to the substitution of domestic unskilled workers with cheaper foreign labour. It is that phenomenon which Mr Molloy wishes to avoid.