Bar-On: Linking stimulus to safety net is brutal
Top treasury officials spoke out yesterday in no uncertain terms about the conduct of the political echelon regarding the various rescues and stimuli under consideration.
"The link made by the Finance Committee between the Finance Ministry's economic stimulus program and the 'safety net' is political and brutal," Finance Minister Roni Bar-On thundered yesterday.
Speaking at the annual conference of the ministry's Budget Department, Bar-On called the linkage "pointless" because ministry officials had never said they weren't considering how to protect pension savers.
The Finance Ministry's desperately needed plans to stimulate the economy through investment in infrastructure and the financial system are lying dead in the water in the Finance Committee - "like hostages in the political battlefield," Bar-On said.
"I don't know how this story will end," the finance minister said, adding that his ministry was standing strong against terrific political pressures and doing its utmost to advance the public good.
Bar-On rejected claims that the Finance Ministry examines all plans through the prism of thrift. But the 'safety net' plan, as presented, is full of holes, he argued: The issues at stake are enormously complex and have ramifications throughout Israel's economy.
Moreover, the debate over the 'net' is rife with political agendas that are alien to the core issue, Bar-On continued: "Primaries, bloated egos...with giant costs and implications for the very structure of the economy and market."
Speaking at the same conference, Budget Director Ram Belinkov was even more blunt: "From a purely economic perspective, the 'safety net' is the most anti-social thing imaginable," he said. "It is a regressive move in which the poor subsidizes the rich. Anybody without deposits in provident funds gets no protection from the government, and anybody with holdings does get it."
The 'safety net' is a bad solution, economic developments or political pressures may force the ministry to use it, Belinkov added.
Last week, Finance Ministry officials fired off a letter to the prime minister's office, demanding that it stop meddling in the ministry's stimulus plan. The prime minister's office shot back that it, for one, wasn't under pressure of elections. Asked about the affair, Belinkov said: "The letter was written in great pain, our of deep concern for the economy, to prevent economic moves that would have cost tens of billions of shekels, in a manner we thought might be irresponsible. In my opinion, the letter achieved its purpose."