The Ministry of Finance expressed great satisfaction today, after the Economic Arrangements bill passed the hurdle of Attorney General Yehuda Weinstein almost unscathed.
In recent years, the Attorney General and his staff have waged tough struggles to remove from the bills reforms considered to be too far-reaching for the Economic Arrangements bill, and which should therefore be the subject of separate legislation. The most prominent recent example is the health reform of the German committee, which was removed from the Economic Arrangements bill that former Minister of Finance Yair Lapid sought to add to the 2015 budget. Early elections prevented the bill from being passed.
Lapid, who opposed in principle the Ministry of Finance's use of the Economic Arrangements bill to pass reforms, sought to pass only four reforms in the bill. The current bill backed by Minister of Finance Moshe Kahlon is broader in scope, covering all the government's main activities, with the possible exceptions of foreign policy and defense. For this reason, the fact that almost all parts of the bill were approved by Weinstein and his team is an considerable achievement for the Ministry of Finance, whose officials attribute it to precise preparation ahead of the discussions with their colleagues in the Ministry of Justice.
Banking: Kahlon loses one
The plan to establish a government credit database will not be part of the Economic Arrangements bill, sources inform "Globes." This is a setback for Kahlon, because the reform is considered one of his pet projects.
At the beginning of the week, "Globes" reported that the professional echelon in the Ministry of Justice had recommended to Weinstein that the plan for setting up a credit database be taken out of the Economic Arrangements bill. The Ministry of Finance was surprised at the recommendation, because the inclusion of the necessary legislative amendments had previously been agreed with the Ministry of Justice, with the agreement of Minister of Justice Ayelet Shaked.
The Ministry of Finance suspects that the banks had a hand in thwarting the initiative, although their official position did not rule out the introduction of the database.
The purpose of creating the database was to enhance competition in the household credit sector, which the banks (especially the two biggest banks - Bank Leumi (TASE: LUMI) and Bank Hapoalim (TASE: POLI)) control, due to the extensive information they possess about their customers. Kahlon's associates, including Dror Strum, whom Kahlon appointed to head the committee for increasing competition between the banks, strongly supported establishing and promoting the database, and it was therefore decided to try to include it in the Economic Arrangements bill in order to more quickly remove the obstacles to its creation.
Founding a credit database is an issue that was already raised by the previous government, An inter-ministerial committee headed by National Economic Council vice-chairman Morris Dorfman was set up to consider the matter, and recently published its conclusions, which stated that a credit database should be established as a means of generating a credit rating for every borrower.
There are currently databases for only the 10% of borrowers considered the biggest problem borrowers - a kind of blacklist. There is no way, however, of rewarding borrowers with a high payment ethic.
The main objection to the database by the Ministry of Justice is that the issue is complex, with aspects involving invasion of privacy, and should therefore be addressed in a separate bill, not as part of the Economics Arrangements bill.
This is not a new argument; it was already raised during the Dorfman committee's discussions.
Published by Globes [online], Israel business news - www.globes-online.com - on July 23, 2015
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