Even if Minister of Finance Moshe Kahlon's plan for benefiting low-income employees is not implemented, Israelis can take comfort in the fact that they have at least had the privilege of watching an entertaining farce, along the lines of "The Budget of Two Masters." The plot concerns the state budget, and what happens when Kahlon's officials find almost NIS 1 billion in surplus revenue, on paper. Kahlon then realizes that he has to hurry and announce "measures for easing the burden," lest his hated rival, Prime Minister Benjamin Netanyahu, preempt him by declaring his own plan. The prime minister and the minister of finance cook up their schemes, and we, the audience, can only laugh, or cry, according to taste.
At this stage of the play, the public can watch the minister of finance triumphing over the prime minister, while incidentally making his pitch to the potential voters of Yesh Atid chairman MK Yair Lapid. In order to add to the insult to Netanyahu, Kahlon attaches a personal message to his plan in the form of a cut in taxes on mobile telephones - a reference to the reform he instituted when he was minister of communications, which overnight made him a popular politician, and persona non grata in the prime minister's residence.
The public is asked to continue watching the play, because it is far from over. It can be assumed that if Netanyahu wants to block his minister of finance's initiative, he will use his status to show who is really in control. This could be the very next scene in the play. Netanyahu could not have prevented the tax cut on mobile telephones, but the main part of the plan, benefits for low-salaried employees, is something he is capable of stopping. For example, he can appoint a "review committee," which will submit its recommendations at some undefined future time. Then we'll see who has the last laugh.
The real problem in this entire affair is that the issue itself - how to provide benefits to low-paid employees and young workers' families - should have been at the top of the economic agenda a long time ago. Now that relations between Kahlon and Netanyahu are at the top of the agenda, the substance is once again secondary. The main thing is the war between these two personalities, not the latest cause of their clash. Before, it was public broadcasting. This time, it is increasing employment grants and/or the need to increase disability allowances.
The real victim of this grotesque drama, of course, is the Israeli public, and especially the working class, which has repeatedly served as the punching bag for an economic policy based on chaos, lack of thought, shooting from the hip, and an absence of any planning. For years, the government has been making the state budget meaningless as a tool of organized policy with a clear and transparent set of priorities. Instead, the government presents the Knesset with a "budget" that no one takes seriously. Sometimes it is a one-year budget, and sometimes a two-year budget. The government presents the budget, the Knesset meddles, raises a tempest, and eventually approves it. A few weeks later, the army demands large supplements, and the government grants them. Then the haredi (ultra-Orthodox) parties demand money for yeshiva students, and the Habayit Hayehudi party devises a plan to build and expand Jewish communities in the territories. The government again approves, and the Ministry of Finance proposes an across-the-board budget cut and the use of unexpected reserves. And so time passes, and it seems to everyone that the economy is running itself. Once in a while, the OECD publishes an embarrassing report exposing the government's social policy. Articles appear here and there in the press, but the report is quickly forgotten, because of a scandal about some newspaper article that outrages some ethnic identity or other, and that is much more important.
This could be the real reason that Kahlon's latest proposal is important. If the money was found to pay for increasing grants to workers, then maybe, through proper planning and a more serious attitude towards the budget, money could have been found for improving the health system, a substantial expansion in professional training, a real improvement in the education system, particularly for poor people, and establishing a real aid system for the disabled, including support and placement in the labor market. All this, and much more, can be accomplished through a long-term policy and annual budgets that implement it. In today's Israel, however, that's a dream. We have gotten used to a policy of shooting from the hip, improvisation, maneuvering, and concealing the truth. The rulers are busy with dubious productions such as the present one, with compromises, and plugging holes. Time goes by, and the show goes on.
Published by Globes [online], Israel Business News - www.globes-online.com - on April 24, 2017
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