Ministers to get 10% pay cut

The Monday vote is meant to start the new Jewish year with a message of “improving the national spirit,” yet it comes as bankruptcies surge, with 2,283 businesses closing in June.

Finance Minister Israel Katz at a meeting of the Finance Committee, July 20, 2020 (photo credit: ADINA WALLMAN/KNESSET SPOKESWOMAN)
Finance Minister Israel Katz at a meeting of the Finance Committee, July 20, 2020
The government unanimously approved the decision, presented by Finance Minister Israel Katz, to voluntarily reduce the salaries of elected officials by 10% on Monday night.
The debate quickly became tense as Transportation Minister Miri Regev asked why should the salaries of judges, or the head of the Mossad, or even the IDF Chief of Staff remain untouched. Jerusalem Affairs Minister Rafi Peretz demanded that IDF generals be subjected to a similar step.
Alternate Prime Minister Benny Gantz called on fellow ministers “not to gang up on the judges or other persons,” Kan reported on Monday night. Justice Minister Avi Nissenkorn said that he won’t object to a decrease of pay to “this or that group” but called on things to be done “in an orderly fashion.”
Katz, who already accepted such a reduction in pay from his own salary, might suggest further cuts in the salaries of civil servants. Such a decision might save the state up to NIS 5 billion per year.
The finance minister confronted Economy Minister Amir Peretz on Monday night after Peretz called on the government to adopt the “German Model” of unemployment benefits. Saying that “this is the human-focused economy I always speak of.”
Katz said he intends to conduct a reform in the public service sector and will not bow down to “threats.” Peretz said that “threats and informing the head of Histadrut [Arnon Bar-David] on future pay cuts by speaking with the press” won’t work as well as direct negotiations. The Histadrut has so far objected to any one-sided pay cuts in the salaries of civil servants – and until now, Katz didn’t confront them head on.
Likud MK Sharren Haskel supported Katz but said “it isn’t enough.”
She called to reduce the pay of anyone making more than NIS 45,000 per month in the civil service, which is what a minister makes. Should the 10% pay cut be passed, the amount will go down to NIS 40,500.
Haskel added that she declined a recent pay increase when it was approved.
The salaries of elected officials are linked to the average salary in the country. So, ironically, when people are laid off, the average salary of those still working goes up as well – and so does the pay of MKs.
The Blue and White Party said that not only would it support the decision, but that its MKs and ministers have been donating 20% of their pay to various NGOs since April. Foreign Minister Gabi Ashenazi donates to an IMPACT “adopt a combat soldier” program and Gantz donates to an “adopt a medical doctor” program.
Interior Minister Arye Deri called on the cut to be even larger – 20% – and to include local council leaders.
“We must set a personal example and show mutual solidarity with those hundreds of thousands badly hurt because of the COVID-19 financial crisis,” he said.
Deri also called on opposition party leaders such as Yisrael Beytenu’s Avigdor Liberman and Meretz’s Nitzan Horowitz to support the decision.
Bankruptcy is rising in Israel with a 48% increase in the number of businesses closing down in June. The current figure is 2,283, compared to 1,544 in June 2019, N12 reported on Sunday evening.
In August the figure rose 52%, with 1,805 businesses closing compared to 1,187 last August.
On Monday the High Court ruled that employers will no longer be paid for the first two days of quarantine, N12 reported. This is due to the financial burden that quarantined employees is having on their employers. 
At least 464,000 workers are currently in quarantine, costing their employers at least NIS 3 billion. 
After the first two days, an employee will continue to be paid by both the employer and the state. However, there is an exception to the rule: if an employee travels abroad and enters mandatory quarantine on their return to Israel, they will not be paid for the entire duration of the quarantine. 
Jerusalem Post Staff contributed to this report.