Post on 06-Mar-2015
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Presented by
The Dror Israel Movement
Socio-Economic Guidelines
The way to a more just and egalitarian society in Israel is through a change in the fundamental economic paradigm and the implementation of a welfare state
Spring, 2011
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Introduction
“Because politics is the coordination of the ends and the means in society’s affairs, there cannot be
any decisions which are made according to a measure other than the efficacy of the means in
attaining the desired end.”
Mordechai Martin Buber
“Any end can be reached so long as the means is imbued from the start with the spirit of the end.”
Gustav Landauer
For the past forty years, a revolution has been taking place in the direction and
destination of Israeli society. From a society which strove to be just, Israel became a
state which, in practice, enlarges socio-economic gaps, drives wide segments of the
public away from education, housing and healthcare, and deepens the inequality
between the very rich minority, and the poor and very poor majority.
In the process, the middle class has been squeezed while social bonds have loosened to
the point of existential danger to Israel itself.
No politician or public figure would ever admit that the Israeli dream and mission of a
just and egalitarian society are not part of their worldview or the priorities for which
they are fighting. Neither would they admit that in reality, in the political arena,
where means and ends are coordinated, policy which is diametrically opposed to the
egalitarian rhetoric is being implemented.
In order to examine the truth of politicians’ and public leaders’ statements in practice,
one must examine the actions they implement in attempting to fulfill the goals to
which they have publicly committed. Such an examination allows greater clarity about
our public servants who are charged with shaping the socio-economic reality via the
many means at their disposal.
This practice is common among right-wing political parties in Israel. Those politicians
who, at election time, swear allegiance to Eretz Yisrael Hashlemah (The Greater Land
of Israel) are closely watched afterwards by the active part of the public which elected
them to see if they will actually implement in practice the means for fulfillment of the
vision to which they committed. An outstanding example was the test of whether
these politicians actively opposed the “settlement freeze” or allowed it to occur. This
litmus test was not applied out of academic interest, but rather to understand whether
there existed any connection between inflated pre-election promises and their
enactment through all available means (laws, policy, etc.).
The relevant question to coordinate an understanding between means and ends, for
our purposes, is thus: What must be done and how, for Israel to return to its original
intended path of socio-economic justice through the establishment of a true welfare
state?
To fulfill this mission, a number of significant steps must be taken – including
legislation and policy – which will lay the groundwork for a constructive process to
change the socio-economic paradigm and create the actual foundations for the growth
of a welfare state in Israel.
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For example: In order to achieve a true welfare state, there must be a significant
narrowing of economic gaps in Israeli society. The Gini Coefficient, which measures
the level of equality in the economy, is a scientific litmus test for examining the
breadth of these gaps. Thus, the way towards a true welfare state is through reduction
in the Gini Coefficient. Any change – positive or negative – in this coefficient during a
particular Government’s term represents a clear indication of the true platform of our
political representatives. Even so, in order to significantly decrease Israel’s Gini
Coefficient, a full series of measures directed and channeled towards this goal must be
implemented.
The goal of these measures is to gradually affect income distribution. Change in
income distribution will affect the breadth of social gaps and, in the wake of this
change, growing sectors of the public will return to the forum of basic civic dialogue in
Israeli society.
These are integrated processes which are based on the recognition that our elected
public servants are, in practice, responsible for implementing this change. What is
needed are not public declarations, but measurable deeds. We shall measure these
deeds and their effects on the basic economic paradigm.
Our platform is based upon four interconnected and complementary planks. The goal
of these components is simultaneously conceptual and practical: the establishment of a
true welfare state in Israel.
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Overarching Goal
Establishing a Welfare State
Goal: Reducing the Gini Coefficient and Changing Income Distribution in Israel
o Use of the Gini Coefficient to measure the level of equality in the economy
o Target: Reduction of Gini Coefficient and a Change in Income Distribution
o In the first three years a target will be set for the reduction of the present
level of the Gini (measured at 0.39) to a level which was common in Israel
until the 1980s – approximately 0.3.
o In the following two years the level will be reduced further to the level which
is acceptable today in Scandinavia – 0.24.
o The goal will always be a continual reduction in the Gini Coefficient and the
promotion of a more equal society with each passing year.
The Means
Changing economic policy: Fulfilling the social rights of Israeli citizens; developing
national infrastructure; and planning and implementing the budget more
democratically.
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Detailed Platform The detailed platform is based on four planks: Changing Economic Policy Page 7
a. Continuously enlarging the national budget framework through determining a new
counter-cyclical fiscal rule
b. Fair taxation: Remove the comprehensive tax burden on disadvantaged groups and the
middle class; implement progressive taxation
c. Creating continuous sustainable economic growth through pro-growth monetary and
fiscal policy
d. Ending currency speculation for the New Israeli Shekel (NIS)
e. Ending the national policy of privatization in all of its forms; forming a committee to
investigate past privatizations and to determine future guidelines for privatization if not
banning the practice altogether
Fulfilling Israeli Citizens’ Social Rights Page 9 f. Fulfilling Israeli citizens’ right to work and achieving the goal of high full employment
g. Strengthening the status of the worker in Israel, with an emphasis on working women
h. Fulfilling Israeli citizens’ right to education, health care and personal security
i. Fulfilling Israeli citizens’ right to housing
State Infrastructure Page 11 j. Defending Israel's Lands and ceasing their privatization
k. Developing the transportation and communication infrastructure throughout the country,
with an emphasis on the periphery
Democracy Page 12
l. Intensifying parliamentary supervision of the budget planning process
m. Delegating authority to government ministries in budget implementation by
institutionalizing an independent and effective role for a government financial adviser
“Where will the money come from?” Page 13
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1. Changing Economic Policy
Poverty is consciously created by Prime Ministers
Zevulun Orlev (former Welfare Minister from the Bayit HaYehudi Party (National Religious
Party): “Ladies and gentlemen, I have said before and I am saying again: Poverty rates in the
State of Israel are not a plague from above and not a decree of fate. These findings, these
details, are the spoilt fruit of Israeli governments’ policy – I emphasize: Israeli governments –
of the past decades… To my chagrin, an extreme and irresponsible neo-liberal policy has taken
control of Israeli society, and there is a failure of social policy in almost every framework: in
the labor market, in the enforcement of labor laws, in the taxation policy… And I will say
something which I have never said before: this is the intended outcome of the economic policy.
Why do I say that this is an intended outcome which was known in advance? Because all of the
Welfare Ministers, each one during his term… warned, alerted, declared that these would be the
results of the economic policy. We presented a very clear reflection of the difficult results of this
policy, results of enrichment of the rich and on the other hand deepening and widening of
poverty. This is not a coincidence. The results of poverty are not a surprise, they are a
foreknown, clear and intended outcome of neo-liberal policy, which is an ideology.”
From a special debate in the Knesset chamber on the poverty issue,
19 October 2010
A. Continuously enlarging the national budget framework through determining a new counter-cyclical fiscal rule1
Resource growth – an essential tool in financing basic rights and narrowing gaps in
society – will be accomplished by continuous growth in the national budget framework
via the determination of a new counter-cyclical fiscal policy, which is based on the
stimulation of necessary growth through budget deficits (an optimal growth target
will be defined as 8%). Thus if X equals expected growth in the current year, and Y
equals the percentage of deficit in the new budget, the fiscal rule will be: 8 – X = Y (expected income: 20 Billion NIS).
B. Fair taxation: Remove the comprehensive tax burden on disadvantaged groups and the middle class; implement progressive taxation
Comprehensive taxes, which are customary today, are an unacceptable burden on the
disadvantaged and the middle class. A program of fair and progressive taxation must
be implemented which will increase the financing for government programs which
fulfill citizens’ social rights guaranteed by Israel’s Basic Laws, thus narrowing social
gaps. Therefore, it is necessary to:
1. Cancel the income ceiling for Social Security payments (estimated income: 1
billion NIS)
2. Reduce the VAT gradually to 5% (estimated cost: 15 billion NIS)
From the government spending perspective the rule would be: (8%-X)+(x*1.4%) = Z
X equals the expected growth percentage; Z equals the growth of government spending as a percentage of the GDP (and
not of the budget). 8% is the optimal growth rate and 1.4% is the exchange coefficient between growth and tax revenue.
The "Israel 15 vision" document, published by the Reut Institute, shows that Israel needs 25 years of consistent 7%
growth per year to put Israel in its proper position.
The funding needed for this deficit will be raised as an internal debt from pension funds. This will give the State a
trustworthy funding source and will give the funds a solid investment option.
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3. Implement the tax brackets proposed by the Rabinovich Committee and add
an additional taxation bracket of 55% for those whose income exceeds one
million NIS per year (estimated income: 21 – 23 billion NIS)
4. Apply income tax to all types of income including from interest, stock
holdings and dividends (estimated income: 6 billion NIS)
C. Creating continuous sustainable economic growth through pro-growth monetary and fiscal policy
Monetary policy which allows moderate inflation and prevents the revaluation of the
New Israeli Shekel will diminish the danger of unemployment and recession, assist
Israeli industries in exporting overseas, and support growth. Therefore it is critical to
identify engines of growth in the economy and support their development. In order to
do so, it is necessary to:
1. Set a moderate, not overly low inflation target of 3% - 5%2
2. Encourage exports through a slow, but continuous devaluation of the NIS via
the renewed implementation of the "Diagonal Strip"3
D. Ending currency speculation
The Israeli economy is subject to speculative activity on two tracks. First, trade in the
New Israeli Shekel is exposed to manipulation by speculators, raising the currency’s
value in a way which encumbers growth and exports, and is therefore liable to lead to
recession and unemployment. Additionally, speculative activity takes place in the sale
of stocks.
A number of simple means, commonly used in other countries, may prevent
speculative activity:
1. Set a graduated tax on stock sales in inverse proportion to the length of their
holding, i.e. the longer the period for which the stock is held, the lower the tax is
(estimated income: 0.1 billion NIS)
2. Apply a 0.25% tax on all currency activity (“Tobin Tax”)4 (estimated income: 4.4
billion NIS)
E. Ending the national policy of privatization in all of its forms; forming a committee to investigate past privatizations and to determine future guidelines for privatization if not banning the practice altogether
In just a few decades privatization has become a value in itself, as if the transfer of
collective assets to private hands, turning basic social services into merchandise,
“outsourcing” basic government activities and all the rest of the idolatry of
privatization benefit the citizen and society. In reality, the damage wrought by
privatization is immeasurable. This policy must be ceased immediately.
Privatization must be completely halted until a governmental committee to investigate
past acts of privatization is convened. This committee will recommend how, or
whether, to privatize so that natural resources and State responsibilities (enforcement,
planning, and implementation) are not transferred to private hands.
Therefore, it is necessary to:
1. Define the current level of State employment of subcontracted labor as the legal maximum
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2. Convene a public committee to determine how the State can decrease subcontracted
employment
2. Fulfilling Israeli Citizens’ Social Rights
F. Fulfilling Israeli citizens’ right to work and achieving the goal of high full employment
Part of the responsibility of a state to its citizens is creating places of employment, in
order to reach the target of full employment. The social reasons to achieve this aim go
hand in hand with the economic reasons: a society in which people work and provide
for their household, is also a society with a high level of consumer demand which
keeps the economy moving. Therefore, it is necessary to:
1. Establish employment and industry centers in the Israeli periphery (estimated
cost: 1 billion NIS)
2. Create a system of free vocational training frameworks paid for by the
government, along with an increase in unemployment compensation for the first
year of unemployment to 100% of the worker’s previous salary, inspired by the
Flexicurity model used in Denmark5 (estimated cost: 1 billion NIS)
3. Act to integrate populations that are not part of the workforce into the job
market, with an emphasis on Arab women, ultra orthodox Jewish men and the
disabled6
G. Strengthening the status of the worker in Israel, with an emphasis on working women
In Israel, a good framework of laws exists for defending the working public, but this
framework is not enforced or implemented. Strengthening the working class (which
comprises the majority of Israeli citizens) with a particular emphasis on creating
parity between men and women will increase purchasing power, which in turn will
create higher demand in the economy. For this reason the minimum wage must also be
raised and unions strengthened. Similarly, public sector workers must also be
strengthened.
Therefore, it is necessary to:
1. Peg the minimum wage to market productivity increase, so long as it remains at
least 50% of the average market wage (estimated cost: 1.5 billion NIS)7
2. The full government stipend for disabled citizens that is currently distributed to
people determined to be at or above a level of 74% disabled should be fixed to
the minimum wage and should remain at that level. All excess government
stipends should be fixed every 6 months to the greater of the following two:
changes in the average wage or the consumer price index of the fifth decile
having the lowest income (estimated cost: 0.35 billion NIS)8
3. Add 210 inspectors to full-time positions in labor law and effective enforcement
of protective legislation with particular emphasis on laws dealing with
workplace gender equality (estimated cost: 0.02 billion NIS)
4. Double the wages of social workers and teachers (estimated cost: 1.5 billion NIS)
5. Peg the wage of State employees to the increase in economic productivity9
6. Obligate employers, through legislation, to negotiate collective agreements with
any representative organization in which at least one-third of its employees are
members
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7. Convene a public committee that will recommend a program for how to shorten
the work week in Israel to the level accepted in Germany and France without
decreasing wage levels. In addition, the committee will recommend how to
reduce the work week by additional hours, also without decreasing wage levels
H. Fulfilling Israeli citizens’ right to education, health care and personal security
This program is based on the premise that the State is obligated to grant all of its
citizens a number of essential services. When the State fails in this task, citizens are
compelled to purchase these services on the “free” market, resulting in the inability for
the poor to receive these essential services. This is the situation in Israel today. We see
education, health and personal security as essential services of this type, and it is
incumbent on the state to provide them for all.
In each of these fields, comprehensive reform is necessary:
1. Education – Legislate free childcare from the age of three months; implement a
longer school day and decrease the average number of students per class to the
standard level for OECD countries (21.4 students per class) (estimated cost for
the first year: 4 billion NIS. Total cost: 16 billion NIS)
2. Health Care – Increase hospital beds to the standard level for OECD countries
(5.6 beds per 1000 people); purchase suitable technology, including MRI
machines, at a level of 11 machines per one million people and distribute them
throughout the country in proportion to the size of population; increase the
number of doctors to 3.8 per one thousand people as is standard in comparably-
sized Western countries. (estimated cost: 6 billion NIS)
3. Personal Security – Increase police officers to the standard level for OECD
countries (3.25 per 1000 people); increase firefighters (640 per one million
people) and fire trucks (5.5 per 100,000 people) (estimated cost: 1 billion NIS)
I. Fulfilling Israeli citizens’ right to housing
The increase in housing prices is one of the most grievous burdens on the shoulders of
the middle class and the poor. The establishment of a welfare state includes fulfilling
the rights of Israel’s citizens to housing, whether through ownership or rental.
Therefore initiation, planning, development, and marketing of housing units in the
Negev and Galilee regions must be implemented; public building projects must be
carried out; “evacuation-building” development must take place in the center of the
country; and the rights of public housing residents and those entitled to such housing
must be defended. The target is to build 30,000 housing units per year on Israel Lands
(estimated cost: 4 billion NIS)
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3. State Infrastructure
J. Defending Israel's Lands and ceasing their privatization
Israel Lands are property of the public and comprise the single most important resource at the
public’s disposal: a priceless resource of great social, economic, national and historical significance.
Therefore the plan to transfer Israel Lands to private hands, including all of the building reserves in
Israel, must be halted. Similarly, agriculture in Israel must be strengthened in order to protect public
lands.
K. Developing the transportation and communication infrastructure throughout the country, with an emphasis on the periphery
The State must reinforce its presence throughout the Galilee and the Negev in
educational frameworks, health, personal security, and employment, and link all these
components to the center of the country. In this manner the Israeli concept of
“periphery” will be eliminated in both its social and geographical meanings. Such
action necessitates the creation of suitable infrastructure beyond the other initiatives
mentioned in this plan including:
1. Pave additional roads and lay additional railway tracks (estimated cost: 30
billion NIS over the course of ten years)
2. Develop public transportation in the periphery to connect them to the center
and further develop public transit within the metropolitan areas (estimated
cost: 2.5 billion NIS)
3. Upgrade the home and business connectivity infrastructure throughout the
country (estimated cost: 0.5 billion NIS)
4. Correct the National Earthquake Preparedness Plan (known in Hebrew as
TAMA 38) to publicly finance earthquake reinforcement for buildings in the
Negev and Galilee (Cost estimate unavailable at this stage)
5. Connect all Israeli towns and villages to a suitable sewage treatment system
(Cost estimate unavailable at this stage)
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4. Democracy
L. Intensifying parliamentary supervision of the budget planning process10
Israel has recently switched to a system of two-year State budgets. This has weakened
parliamentary supervision of the budget planning process, causing the dampening of
public debate on budgetary matters, thus weakening Israel as a democracy. Therefore
the legal mechanism of “time limitation” which enables the authorization of two-year
budgets must be cancelled, and the use of the Economic Arrangements Law must
cease.
M. Delegating authority to government ministries in budget implementation, by institutionalizing an independent and effective role for the Government Financial Adviser11
Research shows that the Israeli Finance Ministry is among the most centralized in the
Western world: it has total control over the expenditures of government ministries.
This is one of the reasons for the fact that over the past few years government
ministries have time after time ended the year with budget surpluses which were then
used for paying off deficits instead of being used for their intended purpose. A renewed
balance between government ministries and the Knesset, as the supervisor of
government activities, is expected to bring a more correct and complete
implementation of the budget.
The following actions must be taken:
1. When money is being transferred from one budget category to another, the
Finance Ministry’s approval will be required, but the Ministry must justify any
denial. When money is being transferred from one line item to another the
Finance Ministry’s approval will not be required
2. A Financial Advisor to the Prime Minister of independent status will be
appointed, whose recommendations will be binding (similar to the Attorney
General) and who will have at their disposal the authority and ability to conduct
planning, inspection and evaluation of the economy of Israel (in contrast to the
situation today in which the economy is managed by a small homogenous group
of Finance Ministry clerks who conduct their work in total seclusion)
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“Where will the money come from?”
One of the first questions that arise when calling for these measures to create a more just society in
Israel is, “Where will the money come from?” This question originates in the belief, carefully
cultivated by economists and politicians, which maintains that there is a shortage of money in Israel.
The implementation statistics for the State budget, as published by the government, show time after
time that there are surpluses and not shortfalls.
In the year 2010 alone, tax revenue was 12 billion NIS higher than planned and this is not the first
time it has happened. In fact, in the past ten years State tax revenue has been continuously higher
than planned. In the past five years these surpluses have totaled 27 billion NIS. In addition,
government ministries have not spent their full budget, primarily because of limitations imposed by
the Finance Ministry. In the past five years, the State coffers accumulated approximately 57 billion
NIS which were allocated to different ministries and were, ultimately, not used.12
The platform we are proposing here is not based only on the use of existing funds, which are
already in the State budget and not being used, but also on enlarging the framework of the State
budget either by setting a growth target or setting a deficit target. A sovereign state has tools to do
so, and there is no reason to fear the possibility of a credit rating reduction, higher debt-production
ratio or other ghosts which economists from the Finance Ministry and Bank of Israel invoke.
So is there enough money? Let’s see if it would have been possible to implement the suggested plan
in 2011.
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Cost of implementing measures to create a more just and equal society (estimated in billions of NIS): Lowering VAT to 5%13 15
Protecting Israel's lands 0
Ending privatization processes 0
Establishing and supporting centers of employment
and industry in the periphery14 1
Establishing professional training frameworks;
Flexicurity (Danish-style) unemployment payments15 1
Raising the government stipend for disabled citizens for the severely disabled
(who are unable to work)16 0.35
Investing in education: Applying a mandatory education law from age three
months, longer school day and building classrooms17 4
Investment in health: Increasing number of hospital beds, medical equipment
and doctors18 6
Investment in personal security: Increasing Number of police officers,
firefighters and equipment19 1
Supporting dispersed population in the Negev and Galilee by improving
transportation and communication infrastructure20 3
Raising the minimum wage21 1.5
Doubling the number of labor law inspectors22 0.02
Achievable realization of housing rights23 4
Doubling the wage of education workers and social workers24 1.5
Democratization of budget preparation and implementation
process through strengthening parliamentary supervision25 0.1
Total 38.47
Additional funding sources manifested in the 2011 budget plan (estimated in billions of NIS): Continual growth of the budget framework 20
Applying 2010 tax brackets 6-8
Applying income tax graduation according to
Rabinovich Commission recommendations26 15
Applying income tax to real income from interest, stocks and dividends 6
Cancellation of income ceiling on National Insurance tax payment 1
Ending speculative activity on the NIS (“Tobin Tax”) 4.4
Applying a graduated tax to stock sales 0.1
Total 52.5
As seen here, the suggested plan creates significantly expanded sources of funding
towards carrying out the suggested measures. The claim that “there’s no money, cuts
must be made” no longer stands as an axiom which cannot be changed or affected.
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1 The need for a counter-cyclical economic policy is demonstrated clearly in the works of J.M. Keynes, Abba Lerner,
Joan Robinson and others. Another counter-cyclical policy proposal was made in 2008 by Ptachya Bar-Shavit in
Financial Immunities to raise Israel's deficit to 7%. See:
http://www.immunities.co.il/_Uploads/dbsAttachedFiles/112%281%29.pdf 2 Frederic Mishkin, former member of the Board of Governors of the U.S. Federal Reserve, recommends setting an
inflation target higher than 2% in his 2007 article: Does Inflation Targeting Make a Difference? published by the
Chilean Central Bank. Furthermore, IMF Chief Economist Olivier Blanchard has recommended setting the US inflation
target to 4%. A similar proposal was made by the San Francisco Federal Reserve Bank's President John Williams. See:
http://online.wsj.com/article/SB10001424052748704511304575075902205876696.html 3 The "Diagonal Strip" is a system that was implemented in Israel in the 1990s based on a "band" in which the NIS is
allowed to fluctuate; the band is determined by the difference in inflation rates between Israel and its major export
markets. Ptachya Bar-Shavit writes extensively on this subject. For example, see this article from 2010:
http://www.immunities.co.il/_Uploads/dbsAttachedFiles/33%281%29.PDF
Or see:
http://www.ynet.co.il/articles/1,7340,L-1450708,00.html 4 Nobel Prize winner James Tobin suggested this in a lecture at Princeton University in 1972 following the collapse of
the Bretton Woods accords, which regulated currency relations until then. 5 A similar change was suggested by the Reut Institute under the section "Security for the Employee"
6 A detailed proposal can be read in the Reut Institute's Israel 15 Vision.
7 The proposal to peg the wage to market productivity was made by Esther Alexander in her book The Power of
Equality in the Economy and by Abba Lerner in Economics of Employment, chapter 14. 8 The state is obligated to ensure the proper living standard of those who can not work. This stipend rate should fulfill
this obligation. 9 The proposal to peg the wage to market productivity was made by Esther Alexander in her book The Power of
Equality in the Economy and by Abba Lerner in Economics of Employment, chapter 14. 10
Thorough research into the Israeli budgeting process by Momi Dahan and Avi Ben Bassat. 11
Thorough research into the Israeli budgeting process by Momi Dahan and Avi Ben Bassat. 12
The data for the years 2005-2010 on the State's deficit and its funding was taken from the Israel Accountant General’s
website on 19.07.2010. 13
Immediate reduction would cost 60 billion NIS; we suggest a gradual reduction over four years. 14
Based on pricing in the proposal for government decision presented by the Industry, Trade and Labor Ministry. See:
http://www.tamas.gov.il/NR/exeres/3FABC258-B628-48B6-A41A-A3693AD76D54.htm 15
Calculated in relation to unemployment benefits paid out by the National Insurance Institute. 16
The proposed amount is a maximum amount, since the office of Social Security does not publish numbers of
"severely disabled". The calculation is based on all current stipend receivers (210,737 people) and not just on the
severely disabled. Therefore it is safe to assume that the actual amount would be much lower. 17
The cost of a mandatory early childhood education law is estimated at some 2.5 billion NIS (Yuval Vergen,
Information and Research Center of the Knesset – 01.07.2009). Execution will take place over four years and therefore
the cost in the first year will be 600 million NIS. The cost of moving to a longer school day is also 2.5 billion NIS
spread over four years, so in the first year the cost will be 600 million NIS (Lior Dettel, The Marker, 13.12.2010). The
cost of reducing classroom size is estimated at about 12 billion NIS (Or Kashti, Ha’aretz 19.11.2007), based on
Education Ministry figures. All of this together, spread over four years, reaches a total cost of 4 billion NIS per year. 18
Cost of hospital beds from the State Comptroller’s Office Report 2009. Cost of MRI machines from Yair Ettinger in
Ha’aretz, 21.06.2006. Cost of doctor training from Amnon Ated, The Medic, 03.07.2007. 19
Figures for police wages from the 2010 Police Budget on the Israel Police website. Figures on firefighting from Yael
Guterman, Globes 30.12.2010. 20
Plan of 30 billion NIS spread over ten years (plan calculated relative to the cost of the Connect Israel transport
infrastructure plan). 21
Finance Ministry announcement, Haim Beor and Motti Basok, The Marker, 03.01.11. 22
Shai Niv, Globes, 09.06.2010. 23
Comparable sum to the state subsidy for 10,000 housing units per year, where the average cost of purchasing an
apartment decreases by 49 monthly salaries. 24
Based on salary figures from the Education Ministry and Welfare Ministry spread over ten years. 25
Despite referring to a process which should increase efficiency and which may have no cost, in order to be
conservative we budgeted this estimated cost for establishing a small new government wing and transferring the
budgeting wing to the Prime Minister’s Office. 26
Execution timeline will be parallel to the decrease in VAT.