Finance Ministry Puts Middle-class Needs at Top of Agenda for 2014

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The government is officially releasing its 2014 work plans Sunday for 26 government ministries, setting out their goals and particular plans for the year. It will also be providing benchmarks through which the ministries’ individual success in meeting goals can be gauged.

The Finance Ministry work plan officially includes nine goals for the year, but its priorities have been widely known and there are no major surprises in its formal work plan.

Finance Minister Yair Lapid has made two overarching goals a particular priority: The first – putting the needs of the middle class at the top of the agenda – is not a surprise, because it was the centerpiece of his campaign for last year’s Knesset election as head of the Yesh Atid party.

The second major goal is creating a growing economy based on innovation.

“Poverty will be overcome not through [government] support and allowances, but rather by helping the poor to find profitable work,” Lapid stated in comments appearing in his ministry’s work plan. “In that way, they will become part of the middle class.”

Israel needs to aim for annual economic growth of more than 5% in the next several years, he said, although he didn’t explain how the goal would be accomplished.

Last year, the economy grew by 3.3%, which, although lower than Lapid’s target, was good compared to many other Western countries.

The specific goals in the ministry’s work plan are infrastructure development (gas, electricity and ports); the use of education to integrate underrepresented populations into the workforce; the availability of capital; enhancing technological mobility; improvements to the public sector; lowering the cost of living through changes in the housing market; increased competition in the food sector; proper regulation of pension savings; greater integration of ultra-Orthodox Jews and Arabs in the labor market; and curbing black market activity.

Although the year is nearly a quarter over, the ministries’ work plans are only being presented to the cabinet at its weekly meeting now.

The 666-page volume of ministry work plans, which was developed under the direction of the Prime Minister’s Office, does not include plans for the Defense Ministry and the Strategic and Intelligence Affairs Ministry.

It does, however, provide added detail from the other ministries regarding their major projects – those involving government expenditure of at least 450 million shekels ($129.3 million).

The cumulative cost of all the major projects in 2014 comes to more than 20 billion shekels, or about 6% of the total state budget. When spending on the projects in other budget years is factored in, the projects’ costs collectively exceed 100 billion shekels.

“The importance of the process lies, in part, in the various ministries’ commitment to specific and measurable goals that are publicly transparent,” Harel Locker, the director general of the Prime Minister’s Office, said.

“Creating a clear and current picture of government activity is required in order to strengthen governance capabilities and is an important component in the ongoing effort to improve and streamline the work of the government and the public sector.”

The work plan for the Economy Ministry (which used to be known as the Industry, Trade and Labor Ministry) includes the establishment of a cooperative bank or cooperative credit unions as an alternative to commercial banks for individuals and small- and medium-sized businesses.

The ministry, which is headed by Habayit Hayehudi leader Naftali Bennett, said the step is necessary due to the highly concentrated nature of Israel’s banking sector and the relatively high price that consumers and small- and medium-sized businesses pay for credit – even if the level of risk to lenders may be higher than for large businesses. The ministry’s goal is to have legislation on the subject prepared by the beginning of 2015.

Other ministry goals include curbing regulatory requirements; establishing a business accelerator program in which large, experienced businesses will mentor less experienced ones, including some in the Arab community; and a fund for Bedouin Negev businesses.

A panel headed by Economy Ministry director general Amit Lang is also due to develop recommendations that would ease the direct importation of goods by individuals. Changes to the law on the encouragement of capital investment are also being considered. These would provide incentives for innovation, improved productivity and improved employment skills.

Prime Minister Benjamin Netanyahu attends the weekly cabinet meeting, Nov. 24, 2013.Credit: AP

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