TIGHTER control of public spending and greater efforts to reduce national debt and taxation are essential if the economy is to achieve its growth potential, according to Mr Tom Toner, the Forfas chairman. All public spending programmes should be subjected to systematic value for money audits, he writes in the organisation's annual report, while tax must also be reduced as a percentage of gross national product.

Work undertaken by Forfas - the State body for co ordinating industrial body - indicates that, with the correct policy framework, ambitious targets can be achieved over the next 10 to 15 years including reducing the unemployment rate to 6 per cent, cutting long term unemployment to no more than 50,000 by 2010 and raising living standards to the EU average.

Mr Toner calls for a recognition of the need to create a vibrant, competitive enterprise sector. National programmes agreed between the social partners "can continue to work well", he says, provided all participants adopt a realistic approach.

"There must be a greater effort to reduce the rate of growth of public expenditure," he writes, with spending rising by 64 per cent between 1990 and 1995, compared to inflation of 17 per cent.

A specific target for national debt as a proportion of national output lower than that required under the Maastricht criteria should be set, Mr Toner argues, while taxation should also fall as a proportion of GNP.

Mr John Travers, the Forfas chief executive, says that the organisation is calling for changes in corporate and personal taxes, the further development and active implementation of competition policy, the achievement of higher levels of education and new science and technology policies.