Poverty report doomed

Shay Niv

The Allalouf committee’s recommendations fly in the face of the government’s economic ideology.

1. The Allalouf committee submitted today much more than a recommendation package to Minister of Welfare Meir Cohen; it submitted a vision and a worldview. And, as much as it is noble, lovely, and correct, it is also problematic and unrealistic. Committee members are basically telling the Yesh Atid minister and the Likud Prime Minister: “We prefer Shelly Yachimovich.” The collection of measures and processes that they recommend are painted in the national colors of Denmark and Sweden, and they are being submitted to a prime minister who sleeps under a painting of Margaret Thatcher.

It is not just the increase in income supplements, which stands in opposition to the views and policies of the Ministries of Finance and the Economy, and those of the prime minister himself. This plan includes the construction of hundreds of daycare centers, construction of subsidized assisted living facilities for senior citizens, dental care for the young and the elderly, nationalization of school health services, the launch of a longer school day, and intervention in capital markets in favor of savers.

Even the recommendation to dramatically decrease the number of foreign workers, including cancelling the issuance of work permits in the construction sector, is a complete reversal of the current government’s policy: just last week, the government approved thousands of additional foreign construction workers, and, if that’s not enough, it is about to authorize the entry of hundreds of Jordanian workers to work in Hotels in Eilat. Harming Israeli workers? As long as the economy is growing.

The more you read the committee report, the more it seems like a return to the happy Trajenberg days. Then, also, there was talk of vision, of welfare policy. Then, just as is expected to occur now, whole chapters were tossed into the back of a drawer. Remember cancelling after-school care? Longer school days? Champion of the middle class Yair Lapid walked into the Ministry of Finance and shelved the plans. Instead, he decided to partially subsidize 3 weeks of half-day summer camp. The Trajenberg reform became a reform of chocolate milk and a roll.

2. Allalouf committee members did not buy into the government’s attitude that an increase in income supplements creates a negative incentive to work. This claim, according to which income supplements perpetuate poverty, are not unfounded - they are just overly simplistic. The incentive to work must be the work itself and the benefits from it, not just the stick in the form of lower welfare payments. True, there are those who will join the workforce only because their benefits have been cut; however, there will also be many others, other poor people, who will become even poorer.

True, the growth of poverty in Israel was halted a few years ago with the rise in employment rates, but, in parallel, the depth of poverty increased. Therefore, the Allalouf committee members are correct in recommending an increase in income supplements, alongside a recommendation to improve professional training, to accelerate the new Wisconsin plan, to increase negative tax subsidies, to build more daycare centers, and so forth.

And, again, we come back to our starting point: Allalouf committee members behaved today as though it was election day for the Knesset, and they were voting strenuously against someone by the name of Benjamin Netanyahu. The protest was certainly heard, but it was not accepted. It will, at most, be another file in the back of another drawer.

Published by Globes [online], Israel business news - www.globes-online.com - on June 23, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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