A plethora of cuts, taxes, price increases, cancelations of benefits granted in the past and streamlining measures were stuffed into the Finance Ministry's 2004 budget proposal.
Of the NIS 10 billion in "cuts" announced by Finance Minister Benjamin Netanyahu, only some NIS 6 billion are actual cuts, and the rest is an attempt to scrounge up from every possible direction revenue items and benefit cancelations that facilitate rounding off the sum to NIS 10 billion.
One of the central clauses in the proposal is the appropriation of profits totaling NIS 1.8 billion accumulated by the Avner compulsory vehicle insurance corporation and the Karnit fund. The surpluses were originally intended to facilitate a reduction in compulsory vehicle insurance taxes, in accordance with a formula worked out in the mid-1970s, when Avner was established. The formula stipulates that the Knesset Finance Committee will keep the compulsory vehicle insurance tariffs in line with Avner's financial situation: If the corporation runs into a deficit, the insurance tariffs are raised; if the corporation accumulates profits, the tariffs are reduced.
In the early 1990s, Avner suffered heavy deficits; and at the time, the treasury knew to demand, in the name of Avner, tax hikes. The reform implemented in compulsory vehicle insurance in recent years, including the closure of Avner, was marketed to the public as a step that would increase competition in the industry and lead to a reduction in the insurance taxes. The treasury's part in the deal was to ensure that the driving public would get back some of the money it paid in the past for vehicle insurance policies.
Now, in an almost desperate attempt to find ways to close up the hole in the budget, the treasury has backed down from its promise: Instead it will transfer the accumulated surpluses to the budget and cancel the reduction in vehicle insurance tariffs that was slated to go into effect in the near future.
The treasury's backtracking on its promise raises a number of thoughts about the easy way in which Netanyahu chooses to fix the numbers. As someone who markets himself as a devout believer in reforms, the finance minister is lending his hand to backtracking from an important reform that promised the public a reduction in insurance tariffs. He is doing so after the policy holders have already coughed up the surplus payments and have no way of taking back the surpluses themselves.
The more serious problem is that the treasury officials are choosing the easy solution of harming 1.5 million insured individuals who, in the past, purchased a service at an exorbitant price, instead of confronting the centers of wanton spending and lack of efficiency in the public sector and local authorities.
Going back on the plan to unite around 150 local authorities is the result of capitulation to pressure from influential political groups that know how to apply their pressure to the right places. In contrast, the public of vehicle insurance policy holders is not a union; it doesn't have emissaries in the Knesset and the party's central committees; and it is used to taking punches in any case.
So what's better, getting into a conflict with the local authorities and Uzi Cohen or canceling the discount on the vehicle insurance tariff of Mrs. Cohen from Hadera?
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