lieberman cabinet meeting 248.
(photo credit: AP)
The Seder is behind us and spring is upon us. Hotels are at near capacity. And yet most middle-class Israelis can't help but be aware of the dark shadow the global economic crisis is casting. From the outset of 2009 the state has amassed a record deficit of NIS 4.8 billion. The picture turns bleaker if we factor in the figures for the last 12 months - NIS 24.8b.
Generally, first-quarter deficits are rare. Current shortfalls arise from the drastic decline in tax revenue due to the credit crunch and ensuing recession. During the first quarter, the public coffers took in NIS 42b. - down from NIS 50b. last year.
Plainly, how much the government takes in via taxes determines how much it has available to pay out. In these hard-times it is called upon to spend even more than when the economy booms and revenues rise. Now, the government must stimulate the economy to instill confidence in investors. It must save jobs even in enterprises that aren't necessarily self-sustaining, since unemployment slows the economy even further. And it must help those already directly hurt by the downturn.
So the government needs to spend more precisely when falling revenues leave the Treasury with less and less money at its disposal. This is the situation Binyamin Netanyahu inherited. His predecessor functioned without a 2009 budget, instead allocating a twelfth of the old 2008 budget on a month-by-month basis.
UNFORTUNATELY, Netanyahu made an appalling situation worse with his 30-member cabinet. We have previously noted that blame falls equally on the political system, on Tzipi Livni's refusal to join the government, and on many voters for failing to support the main parties. That said, however, Netanyahu cannot escape ultimate accountability.
There's no firm data on how much our "super-size me" cabinet will cost taxpayers. But just watching such a bloated government around the cabinet table is demoralizing. The irony is that in his 1996-99 stint Netanyahu was the last premier to implement the now-abrogated Basic Law that demanded a cabinet of no more than 18 ministers. His successor Ehud Barak established a 25-minister cabinet. The floodgates were completely opened when Ariel Sharon amended the law. Netanyahu knows his economics, so - political exigencies notwithstanding - he really should have done better.
Treasury civil servants are now searching for the cash to pay for it all. Among the ideas being floated is a freeze on the wages of all public sector employees, and not implementing wage hikes already agreed upon. This could affect doctors, teachers and university lecturers. Teachers, for instance, may not earn much individually, but cumulatively their increased salaries cost a great deal.
Fomenting labor strife at this juncture is the worst thing the government could do. Since Netanyahu has embarked on a partnership - and a desirable one in existing circumstances - with the Histadrut Labor Federation, we hope the government will not renege on those previously agreed salary increases.
THIS isn't to say that all public sector pay should be out of bounds. Even if the ultimate savings are relatively insubstantial, the government needs to send a message that the era of the fat cats is over.
There are some 1,000 public employees who earn over NIS 40,000 monthly - plus perks. For instance, at the Clalit Health Fund, which is in deep trouble, two cardiac surgeons earn nearly NIS 85,000, and two administrators near the NIS 80,000 mark. Bank of Israel higher-ups earn between NIS 61,000 and NIS 75,000.
Equally scandalous salaries are paid at various public companies, including in the defense and export sectors; the Ports Authority; the Israel Airport Authority; and, yes, in our chronically hard-pressed universities, where some top-scale administrators and academics make do with a monthly income of NIS 55,000-75,000. Some of them have belatedly "volunteered" to take modest pay cuts.
Israeli workers, in the public and private sectors, are prepared to pitch-in and tighten their belts so long as the pain required to set the local economy on a trajectory toward recovery is equitably distributed.
It would be refreshing if ministers took a voluntary pay cut and abandoned some of the superfluous trappings of office in solidarity with the ordinary citizen. Better yet, let some of the superfluous ministers relinquish their redundant ministerial status altogether.
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