The second day of the 19th Caesarea Economic Forum, held this year at the College of Management in Rishon LeZion, included the session on "Cutting red tape a boon to the economy?"
Commenting on the issue of government efficiency, Ministry of Finance director general Haim Shani said, "The question is not whether or not to spend another NIS 2 billion. The important question is on what to spend and who spends it. Is the government dynamic, efficient, and worth investing in?"
Shani promised that, within weeks, a government portal would be opened where it will be possible to open a new business. "This will cut the overall cost of opening new businesses from NIS 840 million a year to NIS 60 million," he promised.
Shani added, "The bureaucratic burden in Israel is estimated at NIS 30 billion a year, or 3.5% of GDP, an amount equal to the budget of the Ministry of Health. This is the direct cost, and does not include indirect costs. This does not mean that the entire amount can be saved, because bureaucracy is necessary."
Outgoing Accountant General Shuki Oren hopes for better transparency in government projects and suggested adopting standards from the business sector. "The problem is that there is real measurement of performance for a government job. When I was an executive at Bank Leumi (TASE: LUMI), I was measured all the time. When I became Accountant General, I was measured by how much I was able to stick it to a tycoon or win good headlines in a newspaper."
Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL) chairman Aharon Fogel commented on the extensive legal involvement in the economy. "We're facing the nationalization of ethics and norms by auditors and legal advisors." He believes that administrative enforcement causes companies to fear taking risks. "With risk-taking, there is no development or growth. The main thing is for the regulator to get his picture in the paper when someone is fined. This administrative enforcement should be uprooted."
Prof. Assaf Hamdani, an expert on regulation at the Faculty of Law at the Hebrew University of Jerusalem, said that regulation was filled with risk and burdened everyone, especially consumers. "The problem is that we have no choice. It's better for the regulator to act before private member bills are proposed." He believes that the solution lies in a change in regulators' strategic thinking in the director of self-regulation or market-oriented regulation.
Former Knesset Finance Committee economics advisor Smadar Elhanani criticized the biennial budget. "It renders the Knesset redundant for a full year. That is why it is undemocratic. The savings in paper from this budget does not justify this harm," she said.
Minister of Finance Yuval Steinitz said in response, "There is no issue of democracy in the biennial budget. If you want to increase the Knesset's power, why not have a three-month budget? Where it written that the budget should be for one year? Democracy is important, but efficient democracy is better."
Published by Globes [online], Israel business news - www.globes-online.com - on June 20, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011