The Bottom Line / Don't Be Fooled

Communications Ministry Director General Avi Balashnikov will be appointed director general of the Knesset - a position that previously never existed. Balashnikov is a long-time confidant of Dalia Itzik, and Itzik succeeded in convincing the members of the Knesset Finance Committee to vote for him. Fine, who wants to argue with the Knesset chair, who gets to decide who participates in delegations abroad and other kinds of perks?

The problem is not Balashnikov but rather a waste of public funds, a waste which is so characteristic of public institutions. There they know how to expand personnel without cutting down anywhere else. Until now the Knesset was managed with the help of Knesset secretary Aryeh Han. Thus, if Itzik thinks he's inappropriate, then let them work out a severance package for him, but why keep both Han and Balashnikov on the job? Is it not needless overlap? Is it not a waste? Such is the way people behave when they're dealing with no one's money.

Indeed, the Knesset determines its own budget, without control by the Finance Ministry, and therefore it enlarges its budget from year to year by leaps and bounds. This year the Knesset increased its budget by a simple 8 percent - more than any other public institution.

And what's the funniest part of it all? That the argument for appointing Balashnikov is that he will implement "efficiency measures and savings." Who said Itzik lacked a sense of humor?

She learned from Olmert

Itzik had someone to learn from: The Prime Minister's Office also grows from year to year without any true limitations.

Olmert introduced an American innovation: chief of staff. He appointed Yoram Turbowitz for this position, but he didn't cut any other senior position in its stead. There remains a director general, an office head and a government secretary. Is there no superfluous duplication of tasks here? Is there no excess of executives here? And if there isn't, how did the office manage to get by for the past 58 years without a chief of staff?

This case also involves other people's money, that of the taxpayers, in whose name they're partying from above but demanding of those of us below efficiency and savings.

The strange story of arnona

The budget division operates in a surprising manner in all regards with the local authorities. One of the reforms included in the recent economic arrangements allows the authorities to sharply raise their 2006 arnona (municipal taxes). The new formula says arnona will be updated according to the average between the rise in the consumer price index and the rise in public sector salaries, times 80 percent to create an efficiency incentive of 20 percent.

However, it turns out that despite the incentive, arnona would increase much more than the CPI of 3.1 percent because public sector salaries rose 5.83 percent due to the cancellation of the economic promotion excise and other costs. In other words, the new method encourages the authorities to pay a bonus to their workers because they will be compensated for this through arnona. Not exactly the wisest move.

On the other hand, the Finance Ministry harmed the income of the local authorities when it gave in to MK Meir Porush of United Torah Judaism and agreed to raise the exemption from the betterment tax for apartments to 140 square meters from 120 square meters. Likewise, properties used for religious purposes received full exemption from arnona. In other words, unrecognized educational institutions will be exempt, yet another benefit to Haredim.

And as if all this weren't enough, let's recall the budget divisions latest brilliant idea: to award the authorities permission to issue municipal bonds ont he stock market. It appears these bonds are needed to reduce financing costs. In practice, the heads of the authorities will be pressured, especially on election eve, to implement grandiose projects, and the ministers will approve them. The result will be an enlargement of debt, serious budgetary problems in future, deficits and strikes - until the state treasury will be once again called upon to save the situation at the expense of taxpayers.