Industry, Trade and Labor Minister Eli Yishai called on the Finance Ministry to cancel its decision to cut NIS 84 million from the budget for his ministry, saying the cut would hurt key programs benefiting economic growth and social advancement.
"Cutting budget items boosting growth, such as research and development, investment, exports, small businesses and tools for reducing poverty will lead to serious damage to the economy's growth and the creation of new jobs, and will prevent the narrowing of gaps in [the country's] periphery," Yishai told the Knesset Finance Committee Wednesday.
The Finance Ministry responded that the cuts were the result of a government decision made in order to keep promises made between political parties while building the coalition.
Yishai lamented the cuts made to his ministry's budget over the years, which brought it to NIS 2.8 billion in 2005 from NIS 4.5b. in 2000, nearly halving it as a proportion of the total state budget while other ministries' budgets were kept as they were or raised.
The Finance Committee reported that Yishai requested NIS 1.8b. more than the NIS 3.6b. allocated to his ministry in the 2006 budget proposal. Of the requested addition, NIS 700 million would go to loans provided by the ministry's Investment Center and NIS 1b. would go to research and development grants of the Chief Scientist's Office.
Yishai said the addition was necessary in order to put Israel into 15th place in terms of per capita GDP within 10 years, which he called a "central goal."
Industry, Trade and Labor Ministry budgetary director Danny Tal noted that Israel's GDP per capita currently puts it in 37th place, with $23,770 in terms of purchasing power. Since other countries also continue to advance, it would take a sustained pace of 6% growth annually for a decade to approach 15th place, Tal said. A decade of 4.5% economic growth each year, or 2.7% per capita, would help realize a more realistic goal of "improving Israel's position in relation to other developed countries."
Yishai also said he would meet soon with Bank of Israel Governor Stanley Fischer and Banking Supervisor Yoav Lehman in an effort to ease the difficulties of "tens of thousands" of small businesses required to settle their overdrafts and arrange a credit limit with the commercial banks within the month. Alternatives must be found to encourage growth among small businesses, he said.
He also indicated that the welfare-to-work program Mehalev - also called the Wisconsin Program - would be enlarged, alongside efforts to "increase the sensitivity with which participants are treated."
The key goals of the ministry under his leadership would be to reduce poverty and narrow social disparities, accelerate economic growth, and strengthen the Negev, Galilee and Jerusalem economically, Yishai said. Greater effort and manpower would be dedicated to enforcing labor laws, including minimum wage, while the number of foreign workers would be reduced by more than three-quarters and more funds would be dedicated to providing daycare to enable mothers to join the work force. Professional training would receive more funding and increased hiring of course graduates would be encouraged, he said.