Reform Falls Victim to Political Self-interest, Again

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Cost of living protests in Israel, June 2012.Credit: Emil Salman

We learned a lot about the level of cynicism among our cabinet members and their leader last week, during the drama surrounding the approval of the state budget and Economic Arrangements Bill. Prime Minister Benjamin Netanyahu, who joined the chorus of those promising to deal with the high cost of living – and even hinted crassly that Finance Minister Yair Lapid was not doing enough on the matter – proved once again that there is no connection between his words and his deeds.

The Economic Arrangements Bill – which supplements the budget and implements economic reforms – only contains four reforms after being neutered in the Knesset. Now it’s stuck because of an attempt to block two reforms that are directly linked to the high cost of living and the growing problem of economic inequality in Israeli society.

The reform of the Jewish National Fund, which after strong public pressure earlier this year was made into a public-benefit corporation – a status which, for the first time in its history, demands some measure of transparency – requires it to transfer 65 percent of its profits every year to the state, for joint investments in infrastructure and real estate projects. The JNF, which holds a large pot of money and 13 percent of the land in Israel, has traditionally served as a source of “petty cash” and as a beehive of jobs for politicians. This is the reason why, until now, no one has dared touch the organization – despite the housing crisis and the skyrocketing price of homes. Netanyahu and his minions in the Knesset are continuing that tradition: Not only are they not encouraging reform, they are even putting a stick in its spokes.

The second, even more important, reform is the implementation of the German Committee’s recommendations on strengthening the public healthcare system. One of the most important of these is the taxing of medical tourism and the revenues of privately owned hospitals. The German Committee deliberated extensively on the issue of private medical services in public hospitals, and reached the conclusion that private medicine – as the collapse of the Hadassah Medical Center proved – is poison for the public health system, and a significant stimulant for the growing inequality in society.

But its conclusions, or the good of the entire public, do not interest Foreign Minister Avigdor Lieberman and the members of his Yisrael Beiteinu party. They prefer to protect their narrow ethnic electoral interests and to torpedo the reform. The medical tourism industry is mostly of a Russian nature, and the city of Ashdod – where a hospital of the Assuta medical chain is soon to be built, with a quarter of its activities private – is a bastion of Yisrael Beiteinu supporters.

Lapid should be praised for his steadfastness against the attempts to block these two reforms. And where is Netanyahu? In this case, too, he is silent and letting the reforms on behalf of citizens get bogged down in the political swamp.

The high cost of living? At the moment there is a more pressing problem: primaries.

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