For the Second
L Year in a Row...
RATIONAL page 71
I am opposed to the govern-
ment's deep involvement in the
education system, which costs us
annually more than $20 billion,
a very sizable portion of the over-
all budget; we must find ways to
save here.
Recent years' wage agree-
ments have left the teachers with
high salaries. We should now use
these in order to instill greater
independence in management.
Perhaps the most disap-
pointing feature in your per-
formance so far has been
your failure to reduce activi-
ties, and its consequent taxa-
tion expansion. Isn't this an
affront to your party's pre-
election Thatcherist talk?
Will we see a relaxation of
this burden by the time you
finish your term here?
Overall taxation in Israel is
something like 40-41 percent of
gross domestic product, higher
than it is in the United States,
but considerably lower than in
northern Europe.
I really want to lower the tax
burden, but rather than look at
this from the point of view of the
taxes, one must view this through
the prism of government expen-
diture. Remember, with a demo-
graphic expansion of some 15
percent over the last seven or
eight years, you need more teach-
ers, more social workers, more
national-insurance funds, more
doctors, more medicines and
what not.
So to maintain expenditure at
its present levels, when you have
a growing population, is just un-
realistic.
I have no problems with in-
creasing taxation to cope with
this increase, the question is how
big a percentage of GDP this
leads us to. If the product grows
and immigration shrinks, then
this is reasonable. A 30 percent
tax burden in the years ahead
would not only be a very ambi-
tious economic target, but would
also entail a very different social
approach, one which would put
us in line with the United States.
And I'm not sure I want U.S.-
style homelessness or health care.
This by no means negates my
basic beliefs, that there must be
more market competition, and
less government interference
which, among other things, now
leads us to further reduce our de-
fenses against foreign competi-
tors.
What has happened to the
Brodet Committee Report on
reforming the Israeli capital
markets?
It was a good report, which
contained helpful proposals for
solving the financial markets' ills,
particularly concerning the en-
couragement of vital long-term
savings schemes. To my regret,
the discussion has not yet ended.
I attempted to bring it up again
[in the cabinet] two weeks ago,
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it will be discussed again soon.
How do you feel when con-
fronting the populism which
was mobilized against you in
the wake of this issue and the
struggles 'surrounding the
budget cuts?
I don't want to get into the
realms of understatement or
overstatement. What I say now
doesn't just apply to the Brodet
Report, but to a host of issues.
Wherever you sit, throughout
the world, whether at the Davos
summit, the Cairo conference or
the International Monetary
Fund's annual meeting, there are
certain linguistic and economic
basics that seem to be the norm
and convention practically any-
where, except here in Israel.
I'm talking now.about both the
coalition and opposition — they
talk in a different, anachronistic
language.
Dealer
RINKE CADIUAO
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For example?
Today there's a proposal to in-
crease the minimum wage from
45 percent of the average to 50
percent of the national average
salary. There are many factories
paying the minimum wage that
are losing money, for instance in
the textile industry in the Druze,
Arab and Jewish sectors. As soon
as you up the minimum wage,
these factories will close down, or
lay off workers.
At the moment, now that we've
passed the budget, people are ap-
proaching me from various min-
istries and saying, "We need more
money." Look, we have a large
budget, a third of which is debts
we are repaying and can't touch.
That leaves us with money
which has all been distributed.
There is no more money, and I
simply find myself telling people
repeatedly, 'Let's all be rational.'
We could answer people's re-
quests by passing money from
one ministry to another. You
want more for education, so we'll
take from health; you want more
for health so we'll take from so-
cial welfare, and so on.
It's not that I'm an evil man,
there's just no more money. The
only other way to do this is by
raising taxes. I can't write checks,
I can only endorse them.
What is your solution to the
foreign-workers problem?
It is critical to the existence of
the Palestinians that we restore
their employment levels to what
they were prior to the Intifada.
There is absolutely nothing for
us to gain by them having a high
unemployment rate.
But if you do bring them
back into the work force, will
it be as road sweepers and
construction workers?
Just look across the world.
What tasks do the foreign work-
ers assume? They are employed
in sectors where there's a local
lack of workers. So Filipino
women become domestic staff,
Thais become farm workers and
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36
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