Benjamin Netanyahu, Prime Minister of Israel, addresses the 66th General Assembly on September 23
Benjamin Netanyahu, Prime Minister of Israel, addresses the 66th General Assembly on September 23, at the United Nations in New York. The committee charged with advising the Israeli government on socio-economic change, following a wave of mass protests against high living costs, on Monday presented its proposals to the premier. © Timothy A. Clary - AFP/File
Benjamin Netanyahu, Prime Minister of Israel, addresses the 66th General Assembly on September 23
AFP
Last updated: October 19, 2011

Israel PM receives key socio-economic report

The committee charged with advising the Israeli government on socio-economic change, following a wave of mass protests against high living costs, on Monday presented its proposals to the premier.

The report, a 267-page document outlining recommendations on housing, the cost of living, increasing competitiveness, social services, education and taxation, was presented to Prime Minister Benjamin Netanyahu by committee head Manuel Trajtenberg.

The committee was set up by Netanyahu last month in a bid to address public anger over the cost of living and wide income disparity, which has seen scores of tent encampments pop up across the country and hundreds of thousands of people protesting.

Among the proposals were: free education, which currently begins at the age of five, would start from age three; a significant cut in the defence budget, increases in both capital gains tax and corporation tax, and an array of housing reforms.

Implementation of the recommendations would cost an estimated 30 billion shekels ($8 bln/6 bln euros) over five years, although both Netanyahu and Trajtenberg have previously agreed that the government will not spend outside the national budget.

"I thank you for this work carried out over the last two months, a record time for realising an historic change," Netanyahu said upon receiving the report. "We will make modifications within the framework of the budget."

Speaking to reporters, Trajtenberg said the source of the problem was threefold: "The difficulty for middle classes of making ends meet by the end of the month," as well as "injustice and social inequalities" and "the sense that public opinion is being ignored by politicians and state institutions."

"The government should consider not only growth but sharing the fruits of growth," he said, referring to the Jewish state's overall good economic health.

The recommendations will be discussed by ministers before eventually being put before parliament, which is currently in recess until the end of October.

No timeline has been set for implementing the recommendations.

Media reports have suggested that the defence budget would have to absorb a three-billion-shekel cut over five years in order to help foot the bill.

Defence Minister Ehud Barak said on Sunday that his ministry would be "willing to contribute what it could to the social protest" in a bid to "bring about a better society."

But defence ministry officials issued a statement on Monday warning the move could result in massive layoffs, and unnamed military officials cited in the press said that cutting the defence budget could harm Israel's ability to deal with security threats.

"There is no doubt that we couldn't offer solutions for all the issues raised, and not even for most of them," Trajtenberg wrote in a blog posting on Sunday before the report was published.

"But focusing on a few central directions of action could alleviate the cost of living, increase the availability and scope of social services, help in providing appropriate housing, increase fair competition in favour of consumers and diminish inequality."

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