Likud MK Regev slams Trajtenberg committee findings
Trajtenberg and fiscal responsibility
Prime Minister Binyamin Netanyahu postponed an anticipated cabinet vote on the
Trajtenberg Report on socioeconomic change to next week after failing to gain
the backing of a majority of government ministers on Monday.
ended a marathon sitting without resolution as Welfare and Social Services
Minister Moshe Kahlon and his Likud colleagues Silvan Shalom and Yossi Peled
joined Israel Beiteinu, Shas and Atzmaut ministers in opposing the
Netanyahu tried lobbying ministers for nine hours before deciding
at around 7 p.m. to postpone the vote. Shas leader Eli Yishai told him,
“Our opposition is a matter of principle. The weakest sectors have been
forgotten on the side of the road. There is no public housing in the proposal.
We will continue to oppose this report until its flaws are fixed.”
also told Netanyahu, “You can’t buy me,” in response to Netanyahu’s offer to
make changes to the report to make it more acceptable to Shas.
leaders of the protest movement also welcomed the postponement of the
“We are satisfied by the postponement of the vote today on the
committee’s report. The public will sit quiet when the prime minister attempts
to pass a vote quickly, in a closed meeting as it happened today,” they said in
a statement. “The solution to the problems of Israeli society is not in giving this or that pacifying candy but in deeply
changing the order of priorities and this can only be achieved by a new social
budget for 2012.”
Daphni Leef, whose Facebook call started the social
justice movement, said “More than a million Israelis did not go out to the
streets last summer only so a report will be snuck behind our
Vice Premier Silvan Shalom questioned Netanyahu’s insistence on
pushing through the report, telling him at a meeting of Likud ministers prior to
the cabinet meeting that doing so was bad for the party, according to a source
in Shalom’s office.
Shalom told Netanyahu that even if the vote passes
the cabinet it would still be defeated in the Knesset, which could lead to early
elections. Netanyahu responded by telling Shalom not to count on such scenarios,
the source said.
The Prime Minister’s Office said in a statement late
Monday that Netanyahu was convinced he would eventually obtain a majority. This
was echoed by Finance Minister Yuval Steinitz, who told Channel 2 News: “We have
been in similar situations to this before – not once, not twice, and not even
five or 10 times – and in the end a majority has always been
Steinitz added that it was important the government accept the
entire report, making only small amendments where necessary.
for Kadima said the government had “voted no-confidence in
“Netanyahu’s failure proves that he is disconnected and
focused entirely on his own political survival and not on the welfare of the
citizens of Israel,” he said.
Kadima accused Netanyahu of “holding the
Israeli economy hostage” in a “cynical” ploy to fight his own political battles,
and called on the prime minister to present a new budget with redefined
priorities for 2012 or, failing that, to call an election.
Trajtenberg and his four team leaders all made presentations to the cabinet on
Monday afternoon, followed by comments from Bank of Israel Governor Stanley
Fischer, a source in the Prime Minister’s Office said.
Fischer called the
report “impressive” and “very important,” according to the source, praising it
for its focus on earlychildhood education and for maintaining the budgetary
framework. He told the cabinet the global economy will soon enter a recession
and the Israeli economy would suffer from over-expenditure, and praised
Trajtenberg for understanding that.
The Manufacturers’ Association and
the Histadrut labor federation both hit out at the Trajtenberg Report before the
cabinet meeting, with the former singling out clauses on national insurance
payments and import taxes it said would endanger competition, and even cause
prices to increase.
A clause raising the employers’ share in national
insurance payments would cost Israeli businesses NIS 2.5 billion a year,
Manufacturers Association Chairman Shraga Brosh wrote in a letter to government
“This recommendation was delivered in contrast to the
committee’s mandate. It will make it more expensive to employ workers, will
damage employment incentives and will even lead to an increase in the prices of
goods and services,” Brosh wrote.
“The claim that employer national
insurance payments are lower than in the rest of the world ignores the fact that
the reason for this is that employers pay more to pension funds [than in the
rest of the world].”
Brosh also took to task a clause canceling all
import tariffs within 12 months, saying it would translate to “the immediate
relinquishment of NIS 2.7 billion in state revenues and the disintegration of
measures that protect Israeli industry against strong countries with which
Israel does not have trade agreements.”
Histadrut Chairman Ofer Eini
blasted the report for “realizing the dreams of the Treasury’s budgets
In his first detailed response since Trajtenberg released
the recommendations last Monday, Eini said: “The Trajtenberg Report gives
legitimacy to the ongoing privatization of construction and other industries
that take advantage of workers, to state avoidance from providing social
services and to unbridled competition without taking into account the
“People took to the streets against the extreme capitalist
outlook of the budget department’s house of study. But what they got from the
government in response was the budgets department in all its splendor, wrapped
in the image of the Trajtenberg Report.”
The Histadrut chief slammed the
report’s handling of price supervision, criticizing the committee for
recommending the removal of import tariffs and for manufacturing competition
instead of setting price controls.
“The protest was directed against
beastly capitalism, but instead what we received was cannibalistic capitalism.
Unbridled competition will mean everyone eats each other and in the end those
who pay the greatest cost will be the workers,” Eini said.
“We are in
favor of competition, but the Trajtenberg report offers us competition according
to the budget department’s wording, which sees ‘price culture’ as the most
important thing and does not care who ultimately pays the cost.”
Federation of Israeli Chambers of Commerce executive issued a statement
welcoming part of the Trajtenberg report, but also expressed reservations over
possible damage to the business sector.
The seven members of the
executive team said the Trajtenberg report is positive when taken as a whole,
praising in particular the removal of import taxes, which they said “will lead
to a decrease in the cost of living and will contribute especially to a
reduction in the price of food and commodities.”
However, they expressed
concern over raising the employers’ share in national insurance payments, and
also criticized sections on increasing company and capital gains taxes.