Gas revenues create illusion of Israeli affluence

Adrian Filut

The government bonus was an April Fool's Joke, but we must make sure that the joke won't be on us.

On April 1, Israelis were informed that the Ministry of Finance would give every family NIS 4,000 for Passover, paid out of natural gas royalties. Reshet Bet Radio called it the "Sheshinski bonus". The April Fool's joke was explicitly approved by Minister of Finance Yuval Steinitz, but not everyone got it, and the ministry was flooded with calls.

Steinitz's associates said that the story was a joke, but that people who called about the bonus weren’t laughing. When told that it was April Fools, some people said that they had already used the promised money to buy food for the holiday.

The amusing but sad story fully reflects the bluff built up around the Taxes on Oil Profits Law (5771-2011) based on the Sheshinksi committee's recommendations, as if the money is already flowing into the government's coffers. But the story also reflects an even greater illusion - that there is enough money in the treasury. This illusion is driving the latest strikes by prosecutors, social workers, and now doctors, and the strikes appear to be spreading at a dizzying pace.

The person who is paying the price for the illusion of prosperity is the man who created it - Steinitz. But he is angering everyone. Over the past six months, the Ministry of Finance has been signing, on an average of once every two weeks, a fat check for higher salaries for all kinds of employees, most of them already members of strong workers committees making utterly unreasonable demands. Six months ago, these workers committees obtained a 7.25% salary hike as part of a collective labor contract to compensate for eroded wages, all of which is in some way or another related to the euphoria and illusion that the Taxes on Oil Profits Law helped create. Now, every union's starting demand is a 25% pay hike, and Steinitz's ministry is paying it.

We have no arguments with the strikers. Most of them do sacred work under conditions that are sometimes impossible. But the argument that we're talking about a budget surplus must be taken off the table. Evidence is that remark by Ministry of Finance Director of Wages Ilan Levin that the latest strikes have driven him crazy.

"We're trying to put an immediate halt to the claims that have begun among some unions that the door is open to salary hikes over and above the labor contracts," Levin told "Globes". He raised the possibility of limiting the right to strike. "Everyone claims justification and sees only his personal discrimination, but it's necessary to realize the overall collective effect. Few are trying to plug the cracks in the dike."

The government bonus was an April Fool's Joke, but we must make sure that the joke won't be on us.

Published by Globes [online], Israel business news - - on April 10, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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