LONDON- Israel's state budget, which is in fact the economic program for the next two years, was released last week. The Knesset approved it in a first reading. A little more than a week ago, a similar event took place in Britain when the prime minister, David Cameron, submitted his economic plan for the coming four years to Parliament. He too won a solid majority. But what a vast difference there is between the two plans!
In his speech to the Knesset, Finance Minister Yuval Steinitz praised and glorified the budget he was presenting, but he added: "We have not yet reached a safe haven since an economic storm of dimensions such as we have never known is raging in the world, and Israel is getting wet."
However, if one examines the new budget, one will find that words are one thing and deeds another. Steinitz's budget simply ignores the storm in the world and the hazards in its wake. This is a budget that is irresponsibly large. There is an additional 2.7 percent added to the expenditure - the highest such addition that any government has approved in the past few years. There is a large deficit, standing at three percent of the product, that leaves the public debt at a dangerous level in a world where, to use his words, an economic storm of dimensions such as we have never known is raging.
Almost 40 percent of the subjects were dropped from the Economic Arrangements Law and in the budget itself there is a shameful surrender to political expenditure. Shas and United Torah Judaism, for example, will for the first time in history get one billion shekels for funding yeshivas and kolels (yeshivas for married men ). The budget also contains a worrisome increase in the number of job slots in the government sector, and there are no cuts in the security budget but rather additions to it.
The budget does not deal with the county's basic problems: Not with the employment of the ultra-Orthodox and not with the level of services and the outdated structure of the public sector. Not with the inflated number of local councils, not with the reform in the Israel Electric Corporation and not with the bottle-necks of the economy: the Airports Authority and the ports system.
On the other hand, right now, at the other end of the Mediterranean other politicians have adopted an altogether different attitude toward the world economic storm. British Prime Minister Cameron and the Chancellor of the Exchequer, George Osborne, have decided that words are not enough. With enviable courage, they have presented the British public with a plan for the biggest budgetary cuts that Britain has known since the World War II.
These cuts amount to 83 billion pounds sterling that constitute 19 percent of the budget for the next four years. As part of the cuts, 490,000 workers will be dismissed from the British civil service and the salaries of all those that remain will be frozen for two years. There will be cut-backs in all the public services, from municipal libraries to the number of policemen, from the budgets of local authorities to the culture budget, from the universities' budgets to welfare spending. The army, too, will have to absorb significant cuts of eight percent and this will include the firing of 42,000 servicemen. Even the age of retirement will be raised, from 65 to 66.
In our country, negotiations have been going on for years with the Israel Broadcasting Authority over an efficiency program. In Britain, they conducted negotiations with the British Broadcasting Corporation for three days and in the end, the BBC's budget was slashed by 16 percent.
In total contrast to what is happening in France, most of the British citizens accepted the plan with understanding and resignation. True, there were protests and even demonstrations, but the differences of opinion were to the point and expressed in a civilized manner. For it is clear that the outcome of these steps will be an increase in investments, fast growth of the private sector and making Britain a success story.
The world is, in effect, divided into two when it comes to dealing with a crisis. On the one side, there is the Barack Obama school of thought that says more expenditure and more deficits. On the other side is German Chancellor Angela Merkel's school of thought that says less expenditure and fewer deficits.
Now Britain has joined the Merkel school. But we, to my great regret, are closer to the Obama way of thinking. But since we are not a world power like the United States, the day will come when we have to pay the full price for this.
I wish we were able to do with Cameron what we did with [the Governor of the Bank of Israel] Stanley Fischer - to propose to him that he serve as the economic prime minister of Israel. To cut the fat from the obese public sector and to make the army more efficient. To make a little order, just as he is doing now in Britain.
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