Rivlin Won, We Lost

By separating it from the Economic Arrangements Bill, a possible telecommunications reform has been sentenced to death by torture in whatever committee ultimately discusses it.

Today, the Finance Ministry will submit the Economic Arrangements Bill accompanying the 2011-12 budget to the Knesset and the process of passing the budget will begin.

Knesset speaker Reuven Rivlin
Alberto Denkberg

This is supposed to be a festive day, bringing tidings of far-reaching plans. But today will instead be gray and boring, like the Economic Arrangements Bill itself.

Once, and not so long ago, this was a revolutionary bill that included numerous reforms, structural changes, revolutions and privatizations that propelled the economy forward. But what lies before us now is a castrated bill, which has been assaulted from every side until its strength failed and it was left, utterly spent, on the floor of the Knesset.

For long weeks, Udi Nissan, the head of the treasury's budget department, did battle to keep the bill alive. But he did not receive the necessary backing from either Finance Minister Yuval Steinitz or his boss, the economic minister-in-chief, Prime Minister Benjamin Netanyahu. And when the head of the budget department has no backing, the result is that Knesset Speaker Reuven Rivlin wins, and some 40 percent of the subjects the bill originally dealt with were removed from it.

Of 67 issues originally included in the bill, 26 important changes were removed. Of these, 22 were excised completely, while four will be transferred from the fast track to the ordinary legislative track after their first reading. But experience teaches that whatever doesn't pass as part of the Economic Arrangements Bill will never pass at all.

The biggest failure relates to the so-called Wisconsin welfare-to-work plan. Six months ago, the prime and finance ministers grandly vowed to pass the Wisconsin plan in the 2011 Economic Arrangements Bill. This is an excellent plan, whose initial flaws have been corrected, and every research study has lauded its success. The program returned thousands of the chronically unemployed, people who had not held a job for years, to the labor market. But the plan was removed from the Economic Arrangements Bill, so the unemployed will go back to living off welfare - and to poverty.

Many other important reforms were also removed from the bill, including plans to rehabilitate the public broadcasting authority, increase the number of Internet service providers, improve public transportation, expand the enforcement powers granted to the treasury's supervisor of capital markets, improve the system of municipal auditing and oversight, amend the debt-collection system, streamline the courts, institute a rapid transit lane at the entrance to Tel Aviv, fine people who defraud the National Insurance Institute, reinforce buildings, increase municipal tax collection and expand the supply of apartments.

We're lucky that Rivlin at least agreed to leave a plan to increase competition in the cellphone industry in the bill, since this is an issue close to his heart: He once served as communications minister.

Every Knesset member knows that Israel managed to survive the worldwide financial crisis relatively unscathed. But do they realize that the main reason for this was the annual Economic Arrangements Law, which completely changed the face of the economy over the last 25 years?

This law enabled dozens of reforms and structural changes to make it through the Knesset, reforms that made the economy more modern, more open, more competitive and more conducive to growth. Without it, we would today have a closed, impoverished and outmoded economy, and the global crisis would have dealt us a mortal blow.

Thanks to the Economic Arrangements Law, we ended hyperinflation and opened the economy to competition from imports. Without this law, we would lag hugely behind in communications. We opened the gasoline and fuel markets to competition via this law, and ditto with the postal service. It was thanks to this law that the Yes satellite television company, which competes with cable, was established, and if Israel has open skies and reasonable airline ticket prices, that is also thanks solely to the Economic Arrangements Law. And these are just a few examples.

Rivlin and his fellow MKs claim the proposals that were split off from the Economic Arrangements Bill will still pass this year, following an orderly process of study and legislation in the relevant Knesset committees. What a sorry joke. Given the populist reality of this Knesset, no reform has any chance of passing these committees.

The minute a reform is separated from the Economic Arrangements Bill, it has been sentenced to death by torture in whatever committee ultimately discusses it.

For there, all the interested parties will fall on it: the tycoons, the lawyers, the lobbyists and the big unions. And they will make sure the reform is filed away in a bottom drawer and never sees the light of day. There are numerous precedents.

Therefore, "Budget Day" this year will be the day the Economic Arrangements Bill dies - and with it, the era of major reforms. A very sad day indeed.