The Difference Between Moshe Kahlon and Santa Claus

Israel's finance minister thinks he can dole out presents to everyone, but all he’s doing is guaranteeing woe, woe, woe.

Finance Minister Moshe Kahlon and Histadrut secretary-general Avi Nissenkorn, December 2015.
Olivier Fitoussi

Toward evening, my wife became a nervous wreck. “What are we going to do?” she asked repeatedly. “Maybe you’ll go down to reception and find out whether there’s a room in the hotel for another night?” It was December 22, the day before Ben-Gurion Airport was set to close due to the pending national strike. We were supposed to be flying back to Tel Aviv on the Wednesday morning and, as the hours passed, my wife’s looks became ever more accusing. I had to stress repeatedly that there would be no strike, that no airport would be closed and that we needed to start packing.

My confidence stemmed from two rules and the nature of the main character involved in the drama. The first rule states that salary negotiations between the government and Histadrut labor federation must be signed in the wee small hours of the morning, so that the Histadrut chairman will be able to appear on the morning television programs and say in a tired voice, “I didn’t sleep” – which is the only proof he has achieved an “excellent” deal. Look, he didn’t sleep all night.

The second rule states that threatening to close the airport is actually positive news. This is a doomsday weapon, one that cannot really be used because of the public outcry that would ensue. That’s why anyone who says he’s closing the airport is actually planning to sign.

The third reason is Finance Minister Moshe Kahlon. This is a minister unwilling to confront any pressure group, who doesn’t want any strike, who appointed a supervisor to make it clear to treasury officials that they must reach an agreement – under any conditions, and at any price.

This is a finance minister who describes himself at every opportunity as being “socially oriented,” whereas a finance minister must first of all be “economy oriented.” He’s always talking about the gifts he distributed to the public as if it were his own money: to the elderly, soldiers, farmers, the chief scientist; providing guarantees for businesses, raising child allowances, lowering corporate taxes, distributing billions in subsidies for the program that awards contracts to developers offering the lowest price to the homebuyer, and giving billions to the defense budget, despite the failure to accept the Locker Committee’s recommendations.

This past week, he distributed several billion shekels to the Arab community, as well as grants to those originating from Arab countries. Everything is necessary. Everything is excellent. There are justifications for everything. But what about a list of priorities? Where will the money come from? From the deficit, which only keeps growing.

After the surrender to Histadrut chairman Avi Nissenkorn last week, Kahlon called it a “historic” wage agreement, which is a bad joke. It’s a deal with highly inflated additions to the public sector. It’s a deal that was not accompanied by the necessary reforms. It’s a deal that gives far more to someone earning 30,000 shekels ($7,700) a month than to someone earning 7,000 shekels.

It seriously harms the private sector, where they won’t get even a single agora, but will pay more taxes, fees and property tax – in order to pay for the fat cats. It’s a deal that undermines growth, exports and employment in the private sector. In practice, it’s a currency revaluation – exactly the opposite of what we need.

And how will Santa Claus pay for all the gifts? By deviating from total expenditures, and a large and threatening deficit that is unparalleled in any European country. This is a policy of waste, which is the main reason for low growth (only 2.3 percent in 2015), low productivity and the worrisome decline in investments.

And that’s what awaits us in 2016, as well. It’s an antisocial policy, because when the crisis arrives – and it will – harsh and painful edicts will be imposed on the weak. It’s inevitable. Look at Greece.

So, because I know how Kahlon thinks, I quietly went about packing my suitcases. In the morning, we set out for the airport with complete confidence. How fortunate that we have a local Santa Claus.