Where’s the money?

As worsening global recession looms, our deficit has grown to disconcerting proportions – a reality that necessitates unpopular belt-tightening.

May 1, 2013 22:28
3 minute read.
Finance Minister Yair Lapid speaking at the Knesset, April 22, 2013.

Lapid speaking at the Knesset 370. (photo credit: Marc Israel Sellem/The Jerusalem Post)


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Israel’s economic bottom line is that the Treasury is scurrying around in search of ways to fill the budgetary shortfall while the Histadrut labor federation does its utmost to scuttle most remedial measures.

On the face of it, this is nothing new. We are treated to such maneuvers whenever a state budget is put together.

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Nevertheless, this year is different enough to warrant more responsible Histadrut reactions. As worsening global recession looms, our deficit has grown to disconcerting proportions – a reality that necessitates unpopular belt-tightening.

We have, however, a new, untried finance minister whose fiscal prudence, or otherwise, is not yet known. Yair Lapid garnered publicity and votes by asking, “Where’s the money?” Perhaps it is time he start looking for it.

Contrary to populist lore, it is not only in the affluent upper crust. Conspicuous waste exists among public sector fat cats – ironically, the ones the Histadrut defends most ferociously. While posturing as the champion of the havenots, the labor federation has evolved into a monopolist oligarchy of the 13 most powerful unions – the ports employees among them.

This assures them of sweet deals that most of us cannot even dream about. Ashdod Port’s harbor pilots – seven in all – offer an enlightening illustration. They each earn between NIS 60,000 and 77,000 a month – more than the prime minister, IDF chief of staff or Supreme Court president.

To be sure, these pilots must be exceptionally skilled, as they perform a difficult and indispensable task. Without their services, docking ships would be fraught with hazards such as running aground, harming the maritime ecosystem and damaging vessels, infrastructure and cargo.

The problem arises from the fact that two pilots are assigned per shift. One works whereas the other remains nominally on call, at home, or elsewhere, but collects full pay, premiums and perks for doing nothing.

The matter was brought up in 2011 before an arbitration forum, which discovered that on-call pilots are never summoned. The arbitrators nixed this arrangement, but it continues. Indeed it was re-arbitrated recently. Ashdod Port’s management feared the union enough to ask that a new works agreement be approved, allowing it to fork out for stay-at-home pilots.

The arbitrators saw things differently and ruled that “a government firm cannot pay wages – from the public coffers – for a job not done.”

For a few weeks thereafter, the pilots worked to rule and created huge backlogs at Ashdod Port, incurring damages of at least NIS 20 million a week, by conservative estimates.

The latest word is that the slowdown strike is over and that new “negotiations” will begin with the Ashdod Port Authority. The latter has bitterly complained to the Treasury that while it cannot pay pilots for staying at home, this practice goes unchallenged at Haifa Port. This, alleges Ashdod, is discrimination.

The very notion that squandering taxpayer shekels by one port justifies such practices elsewhere ought to incense Lapid. Here is where a lot of the money he seeks is hidden – in the deformed practices of monopolies. The ports highlight the egregious harm monopolies cause.

Such excesses speak volumes for why it is high time to privatize our seaports.

There is talk that the privatization of at least Ashdod Port is being considered. But we have heard it before. Embattled as the government is by just to balance the budget, it is doubtful that it would go out on a limb and incur Histadrut wrath with so drastic a move.

That, of course, is unfortunate, because without a thorough overhaul, systemic defects will continue to undermine proper administration and corrode public trust. Only privatizing the ports will in the long run increase their efficiency, by introducing constructive competition between them.

The harbor pilots’ outrage is only one example of power-play travesties at our seaports, and the seaports are hardly alone in public sector carelessness with our hard-earned money. Other dominant unions, capable of bringing the economy and daily life in this country to a grinding halt, extort no less from hapless taxpayers.

No society can allow itself to be held up this way, much less one whose economy is already so hard-pressed.

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