Trajtenberg promises changes on taxation, housing

"Government must increase the share of civilian expenditure in the budget,” committee is recommending ahead of report's release.

Trajtenberg Committee 'Rothschild Team' 311  (photo credit: Moshe Milner/GPO)
Trajtenberg Committee 'Rothschild Team' 311
(photo credit: Moshe Milner/GPO)
Prof. Manuel Trajtenberg published part of the introduction to the Trajtenberg Committee’s report on solving socioeconomic problems on Sunday, one day ahead of the report’s official release.
In a post on his committee’s website, Trajtenberg promised changes in four main areas, all of which he said were directly connected to the grievances raised by the the summer-long wave of protests that triggered the committee’s establishment: housing, competition and the cost of living, social services and taxation.
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“The new breed of Israelis of summer 2011 presented to us on a silver plate that rare and wonderful opportunity to instigate change and to establish a fairer and more just society,” said Trajtenberg.
“We did the best we could to translate their wishes into reality. We are fully confident that the ensemble of recommendations are strong, unprecedented in scope and have the power to kick-start long-awaited change.
“There is no doubt that we couldn’t suggest responses to every problem, or even to most of them,” he admitted, “but the focus on a few central topics has the power to ease the cost of living, expand the availability and scope of social services, help provide suitable housing, expand competition and fairness in the economy to the benefit of consumers, and lower inequality.”
In its introduction to the report, the Trajtenberg Committee listed several guiding principles it said the government should adopt as part of its socioeconomic policy.
“In addition to firm adherence to basic fiscal rules, the government must increase the share of civilian expenditure in the budget,” the committee recommended.
“The government must fix and then regularly update social goals alongside traditional macro-economic goals, including quantitative goals on increasing employment and lowering poverty and inequality.
“Economic growth is the key to enabling long-term supply of Israeli society’s growing needs,” it said, but warned that the government must also take note of the measures of quality of life that are not reflected in growth statistics, such as income disparity, health and the environment.
“An important aspect of quality of life is the level of economic inequality,” the report said. “High levels of inequality create a feeling of injustice, exclusion and alienation, which are likely to harm social cohesion... From now on economic policy must strive for fair distribution of the fruits of growth, including distribution of returns for capital and returns for labor, and between senior employees and run-ofthe- mill workers.”
The committee recommended that the government emphasize the integration of all sectors of the population into the workforce, with a particular focus on increasing the participation of haredi men and Arab women, “while also respecting their ways of life.”
“Their rapid integration into the workforce, which will give them a respectable livelihood, is critical for the continued prosperity of Israeli society and the economy, and will extract these sectors from the cycle of poverty.”
Just one week after a committee on economic competitiveness published its own findings, the Trajtenberg Committee’s report will again remind the government of the need to fight against market concentration, monopolistic force and defense of employees’ rights.
The report’s introduction also emphasized the government’s responsibility to supply public services, and to make them applicable to the changing face of technology and demographics.
“The outsourcing of some of these public services is both legitimate and welcome as a means of enhancing their efficiency and availability to citizens, but only when coordinated with logical planning, with an emphasis not just on cost but on quality and accessibility to workers, and on surveillance and enforcement of proper standards.
“The government must deal systematically with the fundamental failures of the public sector and government services, and must strengthen planning and policy.”
Finally, the committee recommended the government open the channels of discussion with the public, in order to create what it called “participatory democracy.”
“In particular it should put up for discussion changes to and formulation of policy that affect the public, in order to enable the flow of ideas from citizens to the government, and to strengthen the [citizens’] feelings of belonging and to strengthen democracy.
“As such, discussion is required in order to balance the interests of the wider public with those of the strongest players in the economy, so that they will have access to and direct influence on decision-makers.”
The Trajtenberg Committee will present its findings to the government on Monday afternoon, followed by a press conference at which it will deliver its findings to the Israeli public.
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