Bottom Line / False promise
On the eve of the elections, on January 6, 2003, Ariel Sharon stated: "Setting a personal example is extremely important in public leadership and therefore in my next government, there will be no more than 18 ministers.
On the eve of the elections, on January 6, 2003, Ariel Sharon stated: "Setting a personal example is extremely important in public leadership and therefore in my next government, there will be no more than 18 ministers. I have ordered the closure of some government ministries in order to cut expenditure and make government more efficient. I also intend to cut the number of deputy ministers to four and to appoint deputy ministers only in those offices where the scale of operations justifies doing so."
But the elections have passed, the public has swallowed the bait and Sharon has appointed a minister per every three Knesset seats held by his coalition partners and with his own hands created an inflated, inefficient government with four ministers without portfolio, all of them from the Likud. Together with the prime minister the cabinet has 23 members, not quite the kind of slim government that Sharon promised.
Furthermore, the government will have six deputy ministers, the superfluous ministries of science and of tourism have not been dissolved, and we will have to wait and see what becomes of the Ministry of Religious Affairs and whether the Ministry of Labor and Social Affairs is in fact split up.
Failure to tell the truth, contempt for voters, and wasting the public's money is an appropriate backdrop for yesterday's horrific deficit figures.
February's NIS 2.75 billion deficit comes on top of January's humongous deficit. All told, in the first two months of the year, the deficit has already towered to NIS 5.4 billion, a third of the entire deficit planned for 2003.
This figure proves just how low the treasury pulled the wool over our eyes when it submitted the 2003 budget to the cabinet and the Knesset.
Even before the budget had been submitted, we wrote here that the budget was untenable with inflated expenditure and revenue forecasts that bore no connection to reality. But the finance minister and his senior officials decided to go ahead with the budget in any event, and the Knesset gave its seal of approval.
The decline in tax revenues should not come as a surprise. After all, with companies cutting back and laying off every day, a 12 percent decline in real terms in tax collection is no surprise. In March, the government will post only a minor deficit, but the reason is the delayed arrival of NIS 2 billion in aid from United States that was to have been received at the end of 2002.
The opportunity is ripe to explain that the hopes placed in new Finance Minister Benjamin Netanyahu, are misplaced. Privatization won't solve the deficit; it will only provide comfortable financing for part of the deficit. However, even this is important, as it relieves the pressure from the capital markets - long-term interest rates won't rise and that can only benefit the private sector which is collapsing under the burden of high rates.