Leaders call on gov't to increase its 'social budget'

Israel currently ranks 22nd out of 31 OECD countries in individual income levels and below average in purchasing power ranking

By MATTHEW KRIEGER
October 18, 2007 07:02
2 minute read.

 
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In an effort to encourage employment in the country's peripheral areas and reduce nationwide poverty levels, the Federation of Israeli Economic Organizations called on the government to allocate more of the 2008 budget towards addressing these issues. "The main thing that is important for us is that the government demonstrate fiscal responsibility," Uriel Lynn, president of the Federation Chambers of Commerce and a member of the FIEC governing board said this week. "The government also needs to be sure that it isn't wasting resources, but we feel it is very important for more funds to be directed towards alleviating poverty and increasing work force participation," Lynn said, without detailing the amount the FIEC is requesting. Headed by Dr. David Klein, the former Governor of the Bank of Israel, the FIEC includes leading representatives from both the public and private sectors who work to shape what they see as the most pressing work-related issues in need of addressing by the government and also to solidify the spirit of cooperation among its various member organizations. "The FIEC is recommending that the government focus its attention for at least the next five years on social economics," a statement from the organization said. "This concentrated effort will allow us to close the gaps between Israel and OECD-member countries." Israel currently ranks 22nd out of 31 OECD (Organization for Economic Cooperation and Development) countries in individual income levels and below average in purchasing power rankings. Income levels are expected to rise only 2.5 percent next year, according to the FIEC. "We think that the government should set a target higher than the average yearly 3% growth for individual income and that it should concentrate on removing the current hiring freeze that many companies have been forced to set in place. Additionally, the government should budget funds to hire municipal budget directors who will work to help remove much of the bureaucracy that currently exists and improve the level of services offered to business sector employees." Roby Nathanson, the director of the Macro Center for Political Economics in Tel Aviv, speculates that while Israel can reduce the gap that currently exists between it and OECD countries, to do so will take both time and significant resources. "We are talking about a program that will require at least NIS 4 billion a year for a minimum of four-to-five years," he said. "Cutting taxes, increasing work force participation, reducing poverty - these programs are long-term, but I think we will see an impact if a far-reaching and long-term oriented plan is implemented." Additional suggestions in the proposal paper include calls to increase funding for technology education for school children, more of a focus on including haredim and minorities in the work force and an expansion of the government's welfare-to-work Wisconsin Plan. In addition to the FICC, the Federation of Israeli Economic Organizations includes representatives from the Manufacturers Association of Israel, the Hotels' Association, the Contractors' Association, the Industry and Employment Association, the Banks' Association and the Farmers' Association.

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