חזית הסירוב האסייתית מנהיגי סין ויפן: על אירופה לדאוג לעצמה
Slicing, dicing and enticing - but there and weak points to the economic program
Much praise has been heaped on the treasury's economic program, which constitutes the first real attempt to halt the rapid contraction of Israel's business and productive sectors by imposing a crash diet on the public sector. But the plan's weak points bear a sober look.
It is impossible to present a program based on cutbacks and lowering the standard of living among wide swathes of the population, before presenting a plan for reducing government, including the number of ministers, bureaus, aides, drivers, spokespeople, standard-bearers and the rest of the swollen entourages of our leaders. The ministers and Knesset members should also accept a dramatic drop in their standard of living, if they want the public to accept the legitimacy of the economic program.
It is impossible to spearhead a program to rescue the Histadrut's pension funds, including partly retroactive worsening of pension terms, without presenting a parallel program for handling noncontributory pensions.
It is pure hypocrisy on the treasury's part to present the tremendous actuarial deficit run by the Histadrut pension funds as a "ticking time bomb" without disclosing the actuarial liabilities of noncontributory pensions belonging to the nation's civil servants.
The treasury should immediately disclose the actuarial liabilities of public sector noncontributory pensions, and reveal their frightening rate of growth in the last decade, the sources of that growth, the phenomenon's distribution among government offices, and the burden it will impose on the nation's budget in each of the coming 20 years.
It is impossible to present a plan to eradicate the Histadrut pension funds' deficit, without presenting a plan to immediately halt the inflation of the noncontributory pensions' actuarial liabilities, which is a time bomb just as large.
The treasury is shrieking about the Histadrut funds, which are based on cumulative pension plans, running actuarial deficits of NIS 146 billion. Why doesn't it disclose that if the same assumptions are adopted about wage rises and capitalization rates, the deficit of noncontributory pensions is running at over NIS 200 billion?
It is impossible to cut so much as a few percent from the pay of civil servants earning NIS 4,300 to NIS 6,000 a month, under the current economic circumstances. Instead, the treasury should consider sharper cuts in the tubs of lard padding the public sector ¿ and the treasury knows perfectly well where they are, and that now is an incomparably appropriate time to target them.
It is impossible to cut back welfare allowances, wages, and pensions before tackling pension and service terms in the defense establishment. It is impossible to accept that with the help of its violent methods, the defense establishment wins every battle with the treasury over these terms. This is an appropriate time to disclose the real figures for pension and service terms in defense, which keeps adding more jobs; it's time to reveal the actuarial commitments for the defense establishment's noncontributory pension schemes, and to compare the resources streaming to Israel's warriors, with those going to other office-holders.
It is impossible to restore foreign and local investors' faith in Israel's economic policy, if the treasury persists in claiming that it is cutting the budget by only NIS 9 billion, but is committed to a deficit of 3-3.5% for 2003. Cutting only NIS 9 billion from the budget will result in a deficit of at least 4%. The public should be told the truth: The government cannot meet its original deficit target for 2003.
The government should also admit that the key goal of its economic program isn't to "restore growth" but to stop Israel's economic deterioration, which could trigger a foreign currency crisis, a breakdown in the banking establishment, or both. Economic growth won't come back this year. At best, the erosion will stop.
The ultimate goal Netanyahu should present for the multiannual program is to reverse the ratio of the "thin and fat" men, to use his analogy. The public sector should "weigh " only 45% and the private sector, 55%. If that goal is achieved, all the rest will, more or less, fall into place.