Despite Criticism, Draft Budget Leaves School System Behind

Finance Ministry says increasing the education budget won't raise the level of education in Israel.

Despite the many critics of Israeli pupils' academic performance, as well as the state of the universities, it seems the Finance Ministry thinks that increasing education budgets is unnecessary.

Under the current draft of the 2011-2012 budget, the Education Ministry will be receiving only NIS 33.9 billion in 2011, an increase of 4.6% over the 2010 budget, while the higher education budget will increase by 7%, only NIS 500 million, to NIS 7.4 billion.

Finance Minister Yuval Steinitz
Tess Scheflan

The following year, the ministry's budget will increase by 3%, while the higher education budget will barely budge.

In comparison, the national budget as a whole will be increasing by 6% in 2011 - to NIS 345 billion, up from the current NIS 325 billion, and then another 3.9% in 2012.

The defense budget is expected to increase by 5.3% in 2011, from NIS 49.1 billion to NIS 51.7 billion, and then grow by another 2.1% for 2012 - even though the Finance Ministry sought to slice it by NIS 1.4 billion a year.

Over the past year, critics commented on the shortcomings of Israeli students on international exams. In addition, the Organization for Economic Development criticized education in Israel, as did Bank of Israel Governor Stanley Fischer.

However, the Finance Ministry commented last week that increasing the education budget would not raise the level of education in Israel

The basis for the budget for 2011 and 2012 was the framework of Israel's first two-year budget, for 2009 and 2010. The current draft was passed on to ministers last week, along with a draft of the Economic Arrangements Bill. They are scheduled to vote on the two bills at a special cabinet session on Thursday.

However, as usual, the budget's path to approval won't be entirely smooth. In the wake of the crisis of confidence between senior finance officials and the defense establishment, the parties are expected to launch last-ditch negotiations over the defense budget this week. However, they're not expected to get past their standoff, and therefore Prime Minister Benjamin Netanyahu, Finance Minister Yuval Steinitz and Defense Minister Ehud Barak are likely to meet to adjudicate the matter.

In addition, it is believed Steinitz will meet this week with Interior Minister Eli Yishai, head of the Shas faction, to discuss the Sephardi ultra-Orthodox party's objection to freezing and reducing National Insurance benefits. This matter, too, is expected to wind up on Netanyahu's plate for a ruling.

After the budget and the Economic Arrangements Bill receive cabinet approval, they will go to the Knesset for a vote no later than October 31. The Knesset needs to approve themby the end of December. If one assumes there is no coalition crisis, the Knesset will pass the budget on time, albeit with significant changes to the treasury's current proposal.

The budget predicts that Israel's GDP will hit an all-time high in 2012 of NIS 874.8 billion. The 2011 GDP is projected at NIS 841.1 billion.

Besides education, other ministries whose budgets will increase barely, if at all, include the Health Ministry, which would be getting NIS 18.8 billion in 2011, up from NIS 18.1 billion in 2010.

In addition, the budget calls for shrinking the public sector by 1% in both 2011 and 2012. A total of 18% of employed Israelis work for the government - the highest percentage in the developed Western world - and that's just too much, the Finance Ministry believes.

The budget states that Israel will pay back NIS 36.7 billion in debt in 2011, and another NIS 38.6 billion in 2012.