1. Minister of Finance Yuval Steinitz realized at the last minute, only after yesterday's report in "Globes", the trick that Benjamin Netanyahu and Stanley Fischer tried to pull on him. It was a clever attempt to take advantage of a window of opportunity when the other side is still fresh, trusting, scared, and unaware of the heavy consequences of conceding the Bank of Israel employees' demand to sever the connection between them and the Commissioner of Public Sector Wages.
2. Netanyahu wants to do well by Fischer, the responsible, conservative, global face of the Israeli economy. It's important to Netanyahu to see Fischer in a second term as Governor of the Bank of Israel. He sees that as critical to his image in the US and internationally as an economic leader. Netanyahu is alarmed, because it has been intimated to him that if Fischer cannot pass the new Bank of Israel law, he will refuse a second term.
Fischer is undoubtedly a valuable asset to Israel, especially in times like these. But surrender to his demand (which is the demand of the workers committee to which he acceded in his first months in his post, before he really understood what it meant) will cause a critical, long-term blow to the economy. Excluding Bank of Israel employees from section 29a of the Budget Foundations Law means total collapse of supervision of public sector wages.
3. Section 29a says that a public body is allowed to award salary rises only in line with salary rises awarded to civil servants, and that any excess must be approved by the Ministry of Finance Wages Commissioner, acting on behalf of the Minister of Finance.
4. 800,000 men and women are employed in the public sector. Civil servants employees of state-owned companies, the defense establishment, universities, hospitals, health funds, local authorities, and more. Their salary costs are NIS 80-90 billion annually, not including funded pensions that a large proportion of them enjoy. All of them want more, and all of them invent ways of receiving more money through "exceptions".
Exceptions means, for example, paying someone for 80 hours fixed global overtime, when behind the term "global" hides the fact that the employee receives the money even without working a single hour extra. Exceptions means allocating grade 46, the grade of a director-general, to junior workers, to benefit someone close to our hearts. Exceptions means severance grants of millions of shekels to which the employee is not entitled. Exceptions means the whole wages jamboree that has become the norm at the Bank of Israel over the years, in internal settlements hidden from the public and the Wages Commissioner.
5. The Bank of Israel's workers want to remain public servants, because it's very remunerative, but they don't want to be subject to a law that will limit the flow of public cash to their pockets. Fischer, as mentioned, was dragged into this when he took office, but since then this point has become the one great obstacle to legislating the new Bank of Israel law so sorely needed.
Published by Globes [online], Israel business news - www.globes.co.il - on June 3, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009