Dei'ah veDibur - Information & Insight

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17 Adar I 5760 - February 23, 2000 | Mordecai Plaut, director Published Weekly








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Billions Paid in Excess Salaries to Public Servants

by M. Plaut and Yated Ne'eman Staff

Irregular salaries of almost NIS 2 billion were paid to top officials in various public sector bodies in 1998, according to a report this week released by Yuval Rachlevsky, the Finance Ministry's wage director. The total cost to the State, paid to a small group of well-compensated officials, dwarfs the payments made to the entire chareidi sector.

The report covers all state-owned or state-funded institutions including government companies, local authorities, universities, the health system, the Ports Authority, and the Israel Broadcasting Authority. 40 percent of the 701 institutions examined paid excess wages or pensions in 1998. This is down from over 50 percent of the institutions in the previous year, but is still very high.

The high payments violate guidelines and wage agreements, but in most cases they are not illegal and there is no action that can be taken. The Finance Ministry set up a unit to recover payments where it is possible, and last year it saved the State some NIS 35 million, including liabilities, refunds and salaries that were not paid.

Senior executives' salary costs were highest at Clalit Health Services (formerly Kupat Cholim Clalit health fund), the Israel Electric Corporation (IEC), and the Bank of Israel. Clalit had 29 executives each costing NIS 54,923 (about $13,500) per month, while the IEC had 191 in excess of NIS 45,000 and 258 over NIS 40,000. The central bank had eight members whose salaries cost the government NIS 54,539.

The highest wage of all was paid to Yaakov Rosen,the deputy director-general of the Israel Electric Corporation, who was paid an average gross salary of NIS 54,957 per month. The salary of his boss, the director-general of the company Rafi Peled, was considerably less NIS 34,834 in 1998. The actual wage is based on a combination factors including the position, but also taking account of seniority and other elements.

The six government-sponsored universities had 107 employees earning anywhere from NIS 39,847 to NIS 49,137. At Bar-Ilan University, the highest paying, senior officials' wages were an average of NIS 49,137 a month in 1998. Following closely behind were Tel Aviv University at NIS 47,928, the Weizmann Institute at NIS 45,569, and the Hebrew University of Jerusalem at NIS 43,779. All the universities paid salaries in excess of civil service norms.

As a class, one of the worst offenders were the municipalities. All told, 60% of them paid excess salaries. Municipal corporations were slightly worse with 63% of them paying too much. In this sector, the government can often recover excess payments. The Cholon Municipality, for example, will have to return NIS 700 thousand to the government, Ramat Hasharon owes NIS 550,000, and Bat Yam -- whose nine most senior members garnered NIS 38,743 last year, second among municipalities only to Tel Aviv -- NIS 400,000. In addition, Bat Yam's city manager was ordered personally to refund NIS 132,000.

The list of average salaries for regular employees was topped by El Al employees (NIS 15,430 -- $3,850), followed closely by Oil Refineries employees (NIS 15,439), and then workers at the central bank (NIS 14,303) and Ports Authority (NIS 14,150).

In contrast, the average gross monthly wage for all Israeli employees was NIS 6,320 ($1,580) during the third quarter of 1999, the most recent figures available, according to the December Central Bureau of Statistics report.

The IEC responded to the report by issuing a statement saying that its workers are given the "important responsibility of planning and establishing power stations to create electricity." The statement added: "All senior members of the IEC have academic degrees," and that many of senior employees bear responsibility comparable to those borne by their counterparts in the private sector, who earn much more.

A spokesman for the local authorities said that since an agreement was signed between them and the Finance Ministry in March 1999, there has been a definite trend towards reducing the excesses. These were not reflected in the report which covered only the year 1998.

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