No. Israel Isn't a Gaydamak State

The writer A.B. Yehoshua opened the Haifa Conference for Social Responsibility at the University of Haifa with a scathing indictment of the government for turning its back on the socially disadvantaged.

He spared neither Ehud Olmert nor Amir Peretz as he blasted the government for failing to appoint a social affairs minister for many months, citing this as the ultimate proof of neglecting the indigent and deliberately harming them.

The director general of the Prime Minister's Office, Raanan Dinur, who spoke afterwards, said that in holding the social affairs portfolio, the prime minister not only did not harm the disadvantaged, but he improved their situation.

The prime minister transferred considerable funds to the Social Affairs Ministry, a feat no other minister would have managed to accomplish, he argued, but in the heated mood against the government, nobody wanted to notice.

Indeed, the prevalent opinion in Israel is that the state has abandoned its people and left them to the mercy of the brutal market - with no means, budgets or aid. The perception is that the government's place has been taken by business tycoons like Arcadi Gaydamak, large companies that contribute here and there and NGOs that distribute food or warm clothing. They are the ones saving the situation. Without them, the entire social framework would collapse, and poverty and hunger would prevail.
is that true? Has Israel abandoned its people to the mercies of Gaydamak and his ilk?

To examine this, one must first understand that Israel's public expenses are several hundred times higher than all the donations and tithes of all the magnates, companies and NGOs put together.

The government spends some NIS 300 billion on public expenses. It should also be noted that Israeli public expenses, relative to the gross domestic product (47 percent), is higher than average in the West. That is, the state is profoundly involved and its influence is far greater than is customary in the West.

How does this evil state finance its great expenses? Not by imposing tax per capita, heaven forbid, but by levying a very progressive income tax. The three highest deciles bring in 90 percent of total income tax revenues, while the five lowest deciles do not pay income tax. In other words, the upper and middle classes finance the social services (health, education and welfare) consumed by the poor.

Hundreds of thousands of people do not pay any health tax (because they don't work, or because they earn too little), but receive public health services considered among the best in the world. In the wealthy United States, 40 million people do not have health insurance. In Israel, everybody does.

The standard of education should be criticized, but one should remember that the state provides free public education through high school. Even university studies are subsidized by the tax payer by about 70 percent. The state invests NIS 5 billion in higher education and 26.5 billion in the school system. Is that considered abandonment?

The state pays NIS 45 billion annually in allowances for children, the elderly, income guarantees, disabled people, single-parent families and other disadvantaged groups. Not many states can boast of such an advanced national insurance system.

If so, perhaps the accusations of the state's abandoning the people are groundless?

A study presented at the conference showed that 90 percent of the public justifies the existence of inequality - as long as equal opportunity exists. "People who work hard deserve to earn more than those who don't," "people are entitled to keep what they earn, even if it means there are rich people in the country," most of those interviewed in the study say. That means the public is not buying the populistic statements it is being fed.

The public is not accusing the state automatically. It does accept responsibility. The public is aware of the state's huge social investment in its more disadvantaged citizens. It knows that those who cannot pay will receive social services free of charge. The public even understands that if Gaydamak and others stopped donating completely, nothing dramatic would happen. But if the state stopped financing health, education and social welfare, the situation would become dire. We are, after all, not a Gaydamak state, but a welfare state, and this is just as well.