Israel's Finance Minister Unveils Plan for Massive Daycare Subsidies for Youngest

Moshe Kahlon ally denies timing of announcement connected with elections ■ The program can’t be approved until the next government is formed

Finance Minister Moshe Kahlon speaks at a press conference announcing the new program, February 13, 2019.
Tomer Appelbaum

Finance Minister Moshe Kahlon on Wednesday unveiled a wide-ranging plan aimed at expanding and subsidizing publicly funded daycare centers for children under age 3.

The program calls for initially issuing monthly vouchers for families that want to register their children in state-subsidized daycare like those operated by WIZO and Naamat and offer discounts for those enrolling in private centers. The result would be monthly costs of 1,200 shekels ($329), about half the average now, meaning families stand to save 15,000 annually per child.

The plan also calls for building more public daycare centers and renovating existing one with the aim of eventually creating enough centers that the government would no longer have subsidize private alternatives.

The Organization for Economic Cooperation and Development has found that Israel spends only a fraction of what other member countries do on daycare for the very youngest – an average of just $2,713 annually versus $12,400 on average across the OECD. Only about a third of children up to age 3 are in publicly supervised daycare.

Nevertheless, the announcement of the program seems timed to the April 9 election, where Kahlon’s Kulanu Party has been sinking in the polls despite his efforts to position himself as a consumer-friendly finance minister by ordering tax cuts and focusing on reining in soaring home prices.

Until now, however, Kahlon hasn’t taken up the issue of daycare for the 3-and-under group. After pressure from groups on the issue, Kahlon with support for Education Minister Naftali Bennett, Welfare Minister Haim Katz and prime Minister Benjamin Netanyahu agreed to appoint a government committee to examine the issue.

Despite that, Construction and Housing Minister Yifat Shasha-Biton insisted in an interview with TheMarker on Wednesday that the daycare plan had been in the works for several months and that it wasn’t an election stunt.

In any event, the program can’t be approved until the next government is formed. Kahlon said he would demand that it be included in the coalition agreement, meaning that the other partners would have to commit to supporting the legislation required to put it into effect.

Kahlon’s team said the projected cost would be about 4.2 billion shekels annually, although other experts have said that depending on the number of families that join it, the figure could reach as high as 8 billion shekels. In addition, there will be one-time costs of 2.6 billion shekels for building more daycare centers and another 1 billion for training staff and renovating existing facilities.

With the budget on course to run a bigger-than-targeted deficit in 2019, it I not clear where the fund will come from, But Shasha-Biton said he was not concerned.

“We’re taking into account the growth of the economy and the increase in incomes that it will bring about,” she said, saying it would boost families effective income by 12 billion shekels annually.