(photo credit: Courtesy)
Doubling fees and taxes for hiring foreign workers will raise the price of an average apartment by NIS 25,000, building contractors warned Tuesday.
"On the one hand, the government is placing much importance on policy measures aimed at helping young couples buy an apartment and bringing down property prices, while on the other hand, decisions are made that will raise apartment prices," said Nissim Bublil, president of the Association of Builders and Contractors. "Today there are only 8,000 foreign workers employed in the construction industry, compared with 40,000 a few years ago.
"Raising the costs of employing foreign workers without training Israelis who can replace them will instantly boost property prices."
The Knesset Finance Committee on Tuesday passed a proposal by the Finance Ministry to double fees and taxes charged for hiring foreign construction workers. Foreign construction workers may only be employed through the auspices of state-licensed manpower companies.
Contractors currently pay an average of NIS 1,800 a month in fees and taxes levied by the government for the hiring of a foreign construction worker. The new changes, which were passed as part of the Economic Arrangement Bill within the 2009-2010 state budget, would double the fee to NIS 3,600 a month, bringing the total monthly cost of hiring a foreign worker to about NIS 12,000.
"Property prices will immediately go up by NIS 25,000 for an average apartment," Bublil said.
The Finance Ministry is implementing steps to cut back on the number of foreign workers and encourage Israelis to work in their place, in response to the country's rising unemployment and economic downturn. Most foreign workers earn low pay that drags down the wages of Israelis, while taking the place of unskilled local laborers.
The Association of Builders and Contractors is cooperating with the construction workers' union and the Industry, Trade and Labor Ministry to train Israelis for construction work. The first course ended two weeks ago and trained 27 workers; a new course is set to commence this month.
"The process is very slow and we will be able to train only a few hundred Israelis a year," Bublil said. "Before levying higher fees and taxes on hiring foreign workers, affecting property prices, which are already rising because of the drop in construction starts, it would make more sense for the government to speed up the training of Israelis."
There are close to 100,000 legal migrant workers in Israel; as many as 200,000 are here illegally. Most are employed in construction, agriculture and care-giving.