Bureaucracy costs economy NIS 30b. each year

‘We have become the state with the most committees of inquiry in the world, and it is paralyzing,’ says Steinitz.

By NADAV SHEMER
Money 311 (photo credit: Bloomberg)
Money 311
(photo credit: Bloomberg)
Bureaucracy costs the Israeli economy NIS 30 billion each year, Finance Ministry Director-General Haim Shani said Monday.
This translates to roughly 3.5 percent of overall gross domestic product, an amount equivalent to the Health Ministry’s entire budget, he said at the Israel Democracy Institute’s Caesarea Economic Policy Planning Forum in Rishon Lezion.
“The Finance Ministry has set down the aim of easing and simplifying the processes of opening businesses in Israel,” Shani said, adding that his office was currently working with other ministries and the National Insurance Institute to achieve that. The state will launch a comparative index at the beginning of 2012 that will rate the quality of services it provides, he said.
Government Services Minister Michael Eitan (Likud), who was speaking on a panel alongside Shani, compared the high cost of bureaucracy to the Israeli economy to that of the price of dairy products – a topic that has remained in the headlines since a consumer boycott campaign aimed against cottage cheese was launched last week via Facebook. “Last week the cottage cheese protest began on the Internet,” Eitan said. “In actual fact, I have already been taking note and boycotting cottage cheese for several months, after seeing the rising prices. “Nevertheless, the mass protest that began on Facebook has surprised me, and until now I still do not understand why this happened precisely over cottage cheese. After all, this is a marginal product for which there are alternatives. Why is the public at peace with awful government services. Why do they suffer through long lines and being given the runaround?” Finance Minister Yuval Steinitz said the amount of red tape had become a problem, but he warned that the public and media must back off somewhat and allow public servants to feel secure in their jobs. “We have become the state with the most committees of inquiry in the world, and it is paralyzing,” he said. “The most important committee of inquiry we should establish would look at the question of why we have so many committees of inquiry. “I am very much in favor of the war against corruption. Those who are actually corrupt must be punished severely. But public-service officials who do their work reliably must feel secure that they will not be condemned so easily. I am in favor of inquiries that focus on producing lessons, and not those that focus on finding guilt.”