The Bottom Line / My dear, dear friend
National Infrastructures Minister Yosef Paritzky recently announced that he was about to sign an agreement in principle with Turkish Energy Minister Hilmi Guler on importing water from Turkey to Israel.
l Water. National Infrastructures Minister Yosef Paritzky recently announced that he was about to sign an agreement in principle with Turkish Energy Minister Hilmi Guler on importing water from Turkey to Israel. According to Paritzky, at times when we have few Moslem friends, it would be best to safeguard the ones we have.
The agreement states that Israel will import water from Turkey at a cost of $1 per cubic meter (20 cents for the water itself, 70 cents for the shipping, and 10 cents for unloading and local distribution). This is very expensive, because desalinated water costs only 70 cents a cubic meter, while Mekorot supplies water at 40 cents. So, importing from Turkey hardly makes economic sense.
Paritzky and the general public must understand that the moment we bring water from Turkey, the marginal cost of water supply leaps to NIS 4.5 per cubic meter; and because the price of any product must cover at least its marginal cost (or else there is waste), the price of water to homes and industry will also have to rise to NIS 4.5 per cubic meter, as opposed to today's price of NIS 2.
This means that households and industry will be forced to pay twice as much (at least) for their water, and this, before the local authorities add their extras for distributing to the end user. But farmers will still pay just the NIS 1 per cubic meter, such that the waste of public money will be even more painful. Paritzky should know that friends don't buy through bad deals. Such deals only create bad blood between the parties.
l Arnona (municipal property taxes). In the past decade, the Finance Ministry's budgets department has developed a faulty practice whereby it insists local authorities implement cutbacks, but approves, at the same time, rises in the arnona rates. This does not impact on the budget, only on the pockets of the little man and the small business owner.
And so, for years, arnona has risen far higher than the CPI; and now and again, there are those special quirks, such as the "reclassification" that Tel Aviv City Hall implemented in 2000. Mayor Ron Huldai announced it then as a "reclassification", but in effect some 28,000 residents saw sharp rises in their bills, while 17,000 saw symbolic reductions. The bottom line was that Tel Aviv coffers benefited to the tune of NIS 12 million.
In 2002, something happened: Arnona rose by less than the CPI. Given the difficult economic times, the local authorities were permitted to raise arnona by only 3.2 percent, while the CPI index went up by twice this. This year, it appears that the relevant CPI (change in consumer prices from September 2002 to September 2002) will be negative. So maybe we can't demand a reduction in arnona, but at least we can expect a freeze.
In recent years, municipal property taxes have risen so severely, burdening the lives of business owners and, no less, of households too. Instead of raising arnona rates, maybe local authority heads, who will be up for election later this month, should implement some streamlining measures and better management.