Dei'ah veDibur - Information & Insight

A Window into the Chareidi World

5 Av 5765 - August 10, 2005 | Mordecai Plaut, director Published Weekly










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Shema Yisrael Torah Network
Shema Yisrael Torah Network











Poverty Report: 1.53 million Poor in Israel with 714,000 children; Rabbi Ravitz: Money Taken from Children to Wealthy

by M Plaut, G. Kleiman, Eliezer Rauchberger and Yated Ne'eman Staff

The number of poor in Israel rose from 1.43 million to 1.53 million, according to the 2004 Poverty Report, published by the National Insurance Institute (NII). Israel had 714,000 poor children and 394,000 poor families in 2004.

2004 was the third consecutive year in which the number of children in poverty increased. Since 1998, poverty has grown by 50 percent.

Poverty has increased among almost all population segments, including working families. The proportion of poor elderly people has risen from 22.3 percent to 25.1 percent, among large families from 48.9 percent to 54.7 percent; among single-parent families from 27.6 percent to 31.4 percent; and among working families from 10.3 percent to 11.4 percent.

The standard of living in terms of disposable income rose by 3.6 percent in 2004. However, whereas income among the top three deciles rose by 5-6 percent, the bottom decile's income fell 9 percent, and the second lowest decile's income by 2 percent. The proportion of national income of the top three deciles rose at the expense of the bottom four deciles.

Cracks in the Budget

Even though in the hours after the resignation of Netanyahu, the Prime Minister and his office announced that everything would continue as before, only two days after the bombshell significant cracks are already appearing in the new budget.

The Prime Minister announced that the cuts in the budget of the Defense Ministry — NIS 1.5 billion in Netanyahu's budget — would be reduced to NIS 650 million. Vice Premier Shimon Peres also called for new spending.

Finance Ministry officials insisted that any new spending or reduction in cuts must be offset from other parts of the budget, and so far everyone is giving lip service to the overall budgetary goals. However after three years of budgetary cutbacks it remains to be seen if the framework will hold without the firm hand of Netanyahu imposing discipline. Judging by his performance as mayor of Jerusalem, Olmert is not good at imposing budgetary discipline. He left huge deficits to his successor, Rabbi Lupoliansky.

Rabbi Ravitz' Analysis

Despite the press conference accompanying the release of the report, and despite the lack of any major breaking news, the regular press barely mentioned the report on poverty. Yated, however, was there.

"Poverty is one of the most difficult phenomena in the country. It is not a social phenomenon affecting only the margins of society but a phenomenon that harms broad segments and plays a role on the whole society's image and values," said Welfare Deputy Minister MK Rabbi Avrohom Ravitz, opening the press conference he held at the National Insurance Institute (Bituach Leumi) building in Jerusalem on Monday to present a 2004 report called "Dimensions of Poverty and Income Gaps." Rabbi Ravitz praised National Insurance Director Yigal Ben Shalom and the staff of the National Insurance's Study and Planning Authority for their swift, high-caliber work in preparing the report.

"During this period, just one week before the Disengagement process, as everyone is busy with the Disengagement alone, and just one day after Finance Minister Netanyahu's resignation, the poverty report is being released," said Rabbi Ravitz. "In my opinion these figures affect the Israeli society more than the Disengagement. This is the time to remind the [outgoing] Finance Minister that he has a substantial share in the deepening of poverty along with the entire government. The Disengagement is important but that matter will end. Afterwards Israeli society will remain with these shameful poverty figures. I hope after the Disengagement the government will have the wisdom to raise poverty to the top of its agenda.

"According to the plan, we are publishing the 2004 poverty report before the budget talks. Our aim is to present the policymakers with a picture of the social state as they sit down to determine the government's priorities in order to set goals for social reforms in addition to economic reforms. The findings presented in the report raise genuine concerns and clearly indicate the expansion of the dimensions of poverty in Israeli society.

"Unfortunately the Israel of 2004 continues to entrench its status as the leader in the dimensions of poverty among Western nations. Not all of the citizens enjoyed the economic growth of the past several years, not everybody found work and not all workers benefited from the tax reductions. Furthermore those who have not benefited suffered greatly from the broad cut in allowances surrounding all branches of National Insurance, especially Guaranteed Income benefits and Children's Allowances."

Rabbi Ravitz said further, "The Finance Ministry anticipated an improvement in growth and employment during the 2004 fiscal year and reported this as well. Unfortunately the poverty figures show that if there was growth and an improvement in employment, those who gained were the top deciles. The two bottom tenths did not benefit from the growth and the tax-cutting, but were harmed by the reduction in allowances. Billions of shekels were transferred from Subsistence Allowances and Children's Allowances to the tax reforms, which the stronger segments benefited from. As a result, social inequality increased significantly."

Regarding the causes of poverty Rabbi Ravitz said, "Since 2001 the spending on Children's Allowances shrank by 3 billion shekels and by 2009 it will decrease by another billion shekels. The results of the policy are directly expressed in the dimensions of poverty among children."

The Deputy Minister ended his remarks with a call to the Prime Minister and the incoming acting Finance Minister. "I call on the Government of Israel to set social goals as in other nations. Not just deficit goals and inflation goals but a goal of reducing the dimensions of poverty, an employment goal and similar goals."

MK Rabbi Moshe Gafni also responded to the report, saying that the disturbing statistics did not come as a surprise to anyone. "These figures are the fruits of a deliberate, cruel policy to make the rich richer and increase poverty among the poor."

He accused the Finance Minister and ministry officials of "relating to citizens like a financial enterprise in which the rich survive and the poor get cast out based on a policy of ruthlessness. The constant cuts in education, health, various services and allowances allow only people of means to benefit from [these] services and the gap between the classes will grow from year to year. . . . The end of the current Finance Minister's time in office with a poverty report like this epitomizes his policy and actions and their results."

The Finance Ministry also responded to the report noting that the report indicates that two-thirds of the poor are from the chareidi and Arab sectors, which "are characterized by large families and a low rate of participation in [the job market]."

The ministry spokesman also said the report relates to figures for 2004, "which was a year of adjustment from a culture of allowances to a culture of work . . . Already in 2005 we see there are those in this segment of the public who have gone out to work, which will assist those who cannot work. This year tens of thousands of elderly people who received an annual increase of NIS 2,000 will leave the cycle of poverty," he promised.

He claimed the Finance Ministry relied on a study of 137 countries that indicates that the more growth increased the more the income of the bottom two-thirds increased. "In addition to a transformation to a culture of work and assistance to those unable to work, growth is the path to leaving poverty behind."

The Finance Ministry lays the blame for the increase in poverty on the economic recession and unemployment, which it claims struck the weaker strata the hardest.

Rabbi Gafni: Education Ministry Cutting Chareidi Funding

"The Education Ministry is astonishing. More money is always added yet at the same time there are always cuts. Every cut that applied to the general education system applied to chareidi education more. For instance, in bussing there is a 4.8 percent cut in the general education system but in the chareidi education system it comes to 8 percent," MK Rabbi Moshe Gafni said.

Education Ministry Director General Mrs. R. Tirosh said, "Every year the opening of the school year is difficult, but this year more than ever. We have sabotage warnings by teachers' organizations [threatening to launch] labor disputes. The teachers are planning a focused effort to thwart the opening of the school year in 35 towns where the first phase of the Dovrat Report is to be implemented."

Representatives of the teachers' organizations presented the problems contained in the Dovrat Report and complained about the lack of cooperation with them on the part of the Education Minister. "The Dovrat Reform is a cosmetic, organizational reform alone, sleight of hand and throwing sand in the eyes of the public and the teachers," said Ran Erez, chairman of the Post-Primary Teachers' Association.


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