The major cut in the government budget 2002 falls on child allowances. In the first budget draft, which got the government's approval back in September, it was agreed to postpone "the fifth child law," which meant a saving of NIS 500 million. In addition, the government agreed yesterday to cut a further NIS 1.2 billion, so that the total savings on child allowances amounts to NIS 1.7 billion.
The cabinet left the prime minister and the finance minister with the decision on which of two options to get the NIS 1.2 billion in savings: either stopping payments at age 16, instead of the current 18, or making allowances means-tested. This would ensure that families in which the major wage earner receives up to NIS 7,000 a month would not be affected, but for higher income-earners, the child allowances would be cut on a sliding scale, dependent on income. We can sum up the two options like this: One is simple to implement, but unjust - and the second is right, but complicated.
If the cutbacks get passed in the Knesset, then Shas and the United Torah Judaism factions will take the rap, because their constituents that live on child allowances will feel the brunt. That is why Shas leader Eli Yishai made such a show of protest yesterday. He rants and raves at the budget as the "most anti-social ever presented to the Knesset." But truth be told, he is petrified of losing his position in the party, if he becomes the one who failed to avert the evil decree.
The means-tested method is too complicated to introduce, because in Israel there is no information on incomes according to household, and there is no way of checking income from capital, or from additional work. So the potential for distortions and injustices is wide open. Whereas, stopping the child allowances at age 16 is simple, straightforward, but could rouse some opposition from those who argue that expenses go up especially when a child reaches that age. So the correct choice is not Option A, and neither is it Option B, but a complete reform of child allowances.
Today there are vast distortions in the system, so that sums paid to the first three children are ridiculously low, and they only rise on the fourth and fifth child - to the great benefit of the Haredi sector - but it defies any economic logic. All child payments should therefore be brought into unification.
There is NIS 7.1 billion devoted in the state budget for 2.2 million children up to the age of 18. According to this preferred solution, each child should receive a uniform NIS 320 allowance, whether he or she is the first or tenth offspring. And if the government has to cut NIS 1.2 billion, so the allowance falls to NIS 270 per child. Nice and simple. It will be a growth-inducing revolution, because it will benefit those families suffering an injustice, that is the secular, the working families, the ones that contribute, that serve in the army, that pay mortgages, that have two or three children.
Yishai threatens Sharon that if the cuts get passed he will leave the government. Don't let him threaten, let him do it! Maybe then the great secular revolution will begin - starting with the children and progressing to every field of life.
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