Dei'ah veDibur - Information & Insight

A Window into the Chareidi World

10 Ellul 5761 - August 29, 2001 | Mordecai Plaut, director Published Weekly







How Much do Chareidim Really Get?

by A. Porat, with Yoni Rottenberg

This article is the fifth and last of a series discussing the allocation of public financial resources of the State of Israel. This article ends the series but of course the underlying problems, including the inequities and the media manipulations, have no end in sight.

The previous articles dealt with two issues: the claim that chareidim get a big monthly financial package from the government, and the claim that chareidim pay very little tax. They showed that the first claim is based on calculations that are misleading to say the least, including support and subsidies that are received by everyone and calculating tax savings in a ridiculous manner, and that if the same calculations are made elsewhere they show that a typical secular family gets even more per month.

The second claim also breaks down under analysis. Most chareidim do work and pay taxes, for one thing, and also almost half the government's income is from indirect taxes which are levied on consumption, like VAT, which are paid by chareidi consumers as much as anyone else.

An earlier part focused on the government money that is funneled to the various parties who have their fingers in the pie. It explains the important difference in the way chareidi institutions are funded compared to the way that other comparable institutions are funded, namely, that regular institutions (such as boarding schools) are funded from the general budget, whereas all chareidi institutions are funded from support monies.

As we quoted Rabbi Yaakov Gutterman, who until recently worked for the chareidi MKs (now he is mayor of Kiryat Sefer): "The key to understanding this topic lies in the terms `budget' (taktziv) and `support' (temicha). The chareidi public is hardly ever included within one of the sections of the standard budget, but only within the framework of support. That is why we are discriminated against in all government offices. Criteria for the budget are formulated to accommodate the needs of the secular society and in most cases are totally irrelevant to the chareidi public, so that we are forced to make do with the small amounts allocated to us within the support framework. Most of the sums to which each government ministry is entitled are swallowed up by the ministry's budget, and the budget is allocated automatically, whereas money from the support fund has to be fought for anew each year."

The most telling indication of this, as Rabbi Gutterman noted, is the fact that only in the Ministry of Religion is the budget made up largely of support funds, in contrast to every other ministry where support funds form a very small part of the overall budget.

The chareidi MKs, and especially the MKs associated with Degel Hatorah, have been working to convert most of the funding for chareidi education into budget items.

This part discusses child support payments, which recently have been in the news. It is assumed that the chareidi community is the "main" beneficiary of child support payments. Though they do benefit, they do not, as we will see, receive most of the money.

National Insurance -- Excerpts from the Manof Report

It would be impossible to conclude this series without saying something about the topic of child benefits. This is where everybody is convinced that the chareidim rob the state and make a fortune at the expense of the secular public. The facts, as presented in the Manof survey, are quite different.

About six months ago, UTJ representative Rabbi S. Halpert managed to have a law passed that restored the level of child support payments of Bituach Leumi (the National Insurance Institute, somewhat similar to Social Security in the United States) to their level of five years ago. The Treasury estimated the cost of the change at NIS 500 million, less than half of a percent of the budget, but since then secular politicians and bureaucrats have mentioned this increase time and again.

In general, child benefit payments make up only about 20 percent of National Insurance expenditure. Old age and relatives' pensions, on the other hand, constitute 38 percent. These latter payments are constantly on the increase, due to aging of the Israeli population, the increase in life expectancy, and early retirements.

According to the Manof report, the chareidi public's share in old age and relatives' benefits is much less than its relative size vis-a-vis the population as a whole, because the chareidi community, with its blessed increase, is relatively young. Whereas the average proportion of recipients of old age and relatives' benefits in Bnei Brak and Yerushalayim is 8-9 percent, and in the new chareidi settlements of Beitar, Kiryat Sefer and Emanuel -- whose population is primarily composed of young couples -- the proportion is only 0.5 percent, the average figure for Tel Aviv and Ramat Gan stands at 18.5 percent. (It should also be noted that the real average net figure for the chareidi population in Bnei Brak and Yerushalayim is much lower, especially in Yerushalayim where it is difficult to separate out the chareidim from the general public.)

In addition, the chareidi public does not receive its share of various other National Insurance payments in accordance with its relative size. These include unemployment benefit, work accident benefit and employees' supplementary income, which together make up the remaining 22 percent of National Insurance expenditure, as well as alimony payments.

Other payments, such as disability and nursing benefits are probably distributed more equally. Nonetheless, summing everything up, if we were to apportion all National Insurance benefits per capita, we would discover that the "average" secular citizen receives 1.6 times as much as the chareidi citizen.

"Manof" conducted its own survey, based on income per household, and also concluded that the chareidi community receives less.

Child Benefit -- Only Half a Percent!

Let us now focus on child benefit payments, and see just how big the chareidi share in them really is. According to National Insurance figures, 19,000 families in Israel are defined as "having many children" and receive payments for seven children or more. This figure, of course, includes the entire Israeli population including development towns, settlements and Arabs. According to figures published by the Central Bureau of Statistics, the Arab sector makes up more than 50 percent of all the large families in Israel.

It turns out that only 20-25 percent -- at the most -- of the total of payments made to large families, are made to chareidi families. Other sectors of the population also have large families. Even if the chareidim have proportionally more large families, they are still only a small part of the general population, kein yirbu.

Translating this into economic terms, we find that chareidi families receive about 0.2-0.25 billion NIS, or in other words about 0.7 percent of the National Insurance budget, which in 1999 stood at NIS 35 billion (not including supplements).

If we adjust the sums to establish how much these families would receive if they had 4-5 children, we would see that the total additional sum paid out to chareidi families because of their large size amounts to about half a percent (0.5 percent) of the National Insurance budget and about 0.075 percent of the government budget.

In parentheses, we may add that we have received inside information from a senior source that there are Arabs making false declarations regarding births in Israeli hospitals of children from Jordan and the territories in the name of Arab Israelis, for the purpose of receiving child benefit, medical care, and birth grants. Women come from Jordan to their relatives in Israel and give birth in an Israeli hospital. The "husband" then takes to the hospital his real wife's identity card, declaring the child to be his own, as a result of which he receives 18 years' worth of child benefit payments from the National Insurance Office. These Arabs also subsequently obtain an Israeli identity card. This information has appeared in the general press several times, but nothing much is done about it.

Cut Back Support for the Chareidim!

How then, is it possible to deny that the chareidim are milking the coffers of the State?

Surely, politicians promise that if we cut back the "massive" funds allocated to them, we can solve the unemployment problem ("money for work, not for yeshivot"), reduce university fees ("money for universities, not yeshivot") and, who knows, maybe we could even once and for all wipe out the national debt!

In the past, whenever the national budget was presented to the Knesset, it was accompanied by attacks on the religious "blackmailers." That is the method: they focus on a certain point in order to detract attention from the real issue. Those same interested parties, masters at milking the national budget on a grand scale for themselves and their friends, do their utmost to detract attention from the enormous funds transferred to them by pointing an accusing finger at the chareidi public.

Let us take the example of Yossi Sarid, now leader of the opposition in the Knesset, and for about a year the Education Minister in the government of Ehud Barak. One of his first actions in taking office was, of course, to cut the funds allocated for "chareidi culture." He proudly told the media that he had "cut back dramatically, by 50 percent funds, set aside for chareidi culture."

The average person hearing this statement forms the impression that this grand curtailment of funds will lead to a general recovery of the Israeli economy. Little does the typical person realize that the sum involved is equivalent to 0.0001 percent of the national budget! Moreover, the money he saved was simply transferred to another part of the Education Ministry's budget, one which deals with support for Arabs.

It is difficult to believe that the chareidim, who live modestly and in poverty, and are consistently discriminated against, can be constantly accused of blackmail. Such is the nature of brainwashing: facts fade into the background and make way for whichever message one wishes to convey.

An Original Israeli Invention -- a Living Cash Cow

We would like to add a few words about the abuses of other sectors of the country. The information we present here is a matter of public record. It is just that the press is so sympathetic to the recipients of the largesse, that they hardly call attention to it.

The kibbutz ideal of settling the country and the creation of a "new Jewish person, enjoying the labor of his own hands, and working the soil" disappeared long ago. The new kibbutz generation is more familiar with India and Nepal than with the Golan or the Kinneret. In the twenty-first century, the concept of the "Hebrew cow" or the "Hebrew goat" that animated the pioneers a century ago, has become obsolete. This is the idea that Jews are "redeemed" by returning to the land and working it productively. The closer they get to the land itself, the better. The plow and the ox have made way long ago to the combine.

The whole notion of "Hebrew labor," so sacrosanct 50 years ago, is totally unknown today. In 1996 only 15 percent of kibbutz members worked in agriculture. Such is the fate of all ideals dreamt up by human minds: within a short period they collapse on their own.

The twenty-first century world is moving towards hi-tech industry and import, and yet Israeli citizens are expected to finance those few isolated individuals still on the kibbutzim who live a life of luxury, still citing an outmoded vision to justify their lifestyle.

The whole kibbutz concept is irrelevant to our day and age. If there are still people interested in leading a kibbutz lifestyle, they should do so at their own expense, but not at the expense of the Israeli taxpayer. A poor country cannot afford to provide every small group with a whole infrastructure of roads, water, electricity, telephone and grants.

In fact, several kibbutzim have disbanded and converted into rural settlements, without any collective ownership. More are said to be considering the move.

The State has catered to all the needs and desires of some small, far-flung kibbutz, bringing in all the utilities at great cost, when hundreds of thousands of Arabs in settlements sometimes remain without regular water and sewage systems.

Financial Burden on the Economy

The kibbutz sector constitutes a heavy financial burden for the Israeli taxpayer. Kibbutzniks make up only about 2 percent of the population (about 125,000 people), but their relative cost to the State far exceeds their numbers. If the bus journey on the profitable Bnei Brak--Yerushalayim route costs NIS 18, that is because we have to subsidize the many unprofitable routes of Egged which service the isolated kibbutzim. The same applies, as we said, to the costs of the road system, the electricity infrastructure, water supply, telephone lines and more.

In the field of education too, the kibbutz sector is the most expensive one. The average kibbutz class has about 20 pupils, as opposed to a class in the middle of the country which can sometimes have as much as double that amount of students. A whole framework of buildings and teaching staff for a small amount of pupils has to be maintained. In other words, the costs are around double. Kibbutz schools are also entitled to many generous benefits, such as transport for pupils, computerization and so on. However, all this pales into insignificance compared to the massive funds received by these schools from the Authority for Education for Settlements.

Whereas the sum set aside by the Education Ministry for the total primary school population of 695,000 children, stands at NIS 6.15 billion, and the sum for the secondary school population of 554,000 children at NIS 6 billion, this exclusive group of pupils living on kibbutzim (65,000 in number including primary and secondary school) receives NIS 1.6 billion!

In other words, a regular student costs the state about NIS 10,000 a year and a student funded by the above Authority about NIS 26,100 a year -- more than two-and-a-half times as much. Kibbutz pupils (both primary and secondary) all come within the ambit of the Authority, and make up about a third of all students in it. We can reasonably assume that if we were to calculate the sum allocated by the Finance Ministry to the multitude of chareidi school children, it would come to less than the astronomical sums received by 65,000 privileged kibbutz children.

Moreover, several kibbutzim have caught on to the profitability of this business, and have set up frameworks for children from outside the kibbutz and even for children from abroad. This way the kibbutz has it both ways. On the one hand, it can continue to portray itself in the media as the torchbearer of the Zionist enterprise, and at the same time make money, since each additional student adds funds to the kibbutz treasury. Each student brings in another NIS 26,100 to the system from the Authority for Education for Settlements, apart from funding for boarding schools, etc. (The Lior committee fixed the monthly sum for the pupil at a boarding school at NIS 1587). In a kibbutz, where the infrastructure for agriculture and boarding schools is already in place, all this money is pure profit.

Certain pupils are also supported in part by the Labor and Social Welfare Ministry, and students from abroad get funds from the Absorption Ministry. Some kibbutzim even ask parents to contribute to their costs!

When it comes to exploiting the state's "resources" (the budgets), kibbutz society is still very creative.

Mother Earth

All this is small money compared to the great land robbery. 268 kibbutzim sit on about one-and-a-half million dunam of expensive land. This land was originally given to them for agricultural use, but now serves other purposes. In their contracts, it says explicitly that the land is given to them only for agriculture; if they use it for something else, it reverts to the State. This is not the way it has worked out in practice.

For example, Kibbutz Gan Shmuel, which owns about 6000 dunam of land, has about 850 residents, Ein Charod (Meuchad) has about 11,000 dunam and 850 people, Ein Charod (Ichud) also about 11,000 dunam and 760 people. Kibbutz Ginossar has about 5600 dunam and a population of about 650.

Incidentally, these figures are taken from the book Every Place and Site published by Karta and are updated only to 1985, but we may reasonably assume that any changes that have occurred since are negligible. The divorce rate in the kibbutz sector today stands at more than 1 in 3 and the birth rate is very low.

Ramat Gan, on the other hand, has a population of 124,000, and an area of 12,243 dunam, Bnei Brak has 141,000 people living on 7020 dunam, Lod has 9200 dunam for 41,000 and Tel Aviv has 50,000 dunam for 321,000 people.

It turns out that the average population density of a kibbutz is about 9-10 dunam per person, compared to the urban average of about 0.1 dunam per person, and in Bnei Brak about 0.05 dunam per person!

In addition, people living in urban centers are forced to pay a fortune for every clod of earth, and very high monthly rates of local tax (arnona), whereas kibbutz inhabitants received their land for free.

Young couples are collapsing under the weight of mortgages and loans, because State-owned land is controlled by smooth land robbers with a public image of upright idealists.

Kibbutzim have discovered this gold mine, and decided to make easy money. Why work and sweat if you can rent out land you got for nothing for a fortune? In the past, agricultural land was leased out to Arab farmers who worked the land and paid the "owners" off the books to keep it quiet, but today kibbutzim have become more sophisticated and they openly and officially rent out their agricultural areas to industry and shopping centers, charging per square meter.

In kibbutzim dealing openly in the real estate market, there is an ongoing secret struggle between competing parties over rights to these lucrative plots; kibbutz owners impatiently wait for their properties to be ready for marketing, so that they can divide up the spoils. Anyone who has left the kibbutz, not to mention somebody who has never been a member, has no chance of being accepted or re-accepted into it. In the meantime, they continue to cultivate the agricultural grounds, in order to preserve the property. Every so often, the kibbutz manages to make easy money when a year is declared a drought year or one of natural disaster.

Not only do the kibbutzim exploit state property, treating it as their own, they also work it on Shabbos, claiming that the law does not apply to them. Their chutzpah seems to know no limits. When it was suggested that their massive debts be cancelled in return for the use of "their" lands, they refused.


The "creative society" of the kibbutz turned within a short period of time into schnorrers of major dimensions. Their debts are estimated to be in excess of NIS ten billion. In December 1989, the state wrote off a debt of NIS one billion and the banks another NIS 650 million in the context of the "Kibbutz arrangement." In addition, the kibbutzim received a loan of NIS 3.3 billion, payable over 25 years.

In 1999 terms, the kibbutzim's debt ten years previously is estimated to have been NIS 17.2 billion, of which NIS 6.13 billion was cancelled and NIS 11.07 billion is being paid back. Those in the know say that this is only the tip of the iceberg, that the kibbutzim are in danger of total liquidation, and that the financial crisis of the eighties can only get worse.

Ideological Bankruptcy

The bankruptcy, however, is not only economic but also ideological. Almost nothing remains of kibbutz values. Kibbutzim long ago lost their original character, having been transformed into economic bodies, dependent in many cases on the Israeli taxpayer. The creative society has become an exploiting one. Mother Earth died long ago, and today the only talk is of inheritance. The "Hebrew cow" has not had a better fate: instead of providing milk, it milks the funds of the state.

Even the crown of the kibbutz enterprise, the dining room, has not remained unaffected: today kibbutzniks eat using magnetic cards. It has become an open secret that it is only a matter of time before privatization (a taboo word in the past) takes place. Within a short period of time, the kibbutzim will turn into full-fledged economic bodies, and we can expect to see villas and cottages flourish on the grounds of kibbutzim.

The kibbutz ideal, which captured the hearts of the younger generation in the thirties, that all are equal, no more rich or poor, no discrimination between men and women, was a naive and childish philosophy which tried to change human nature.

The first generation was so taken with the kibbutz outlook that even the family unit acquired a new "spiritual" content. The results were not long in coming, the divorce rate went up rapidly and the birth rate decreased accordingly. The younger generation of "kibbutz children" rebelled, preferring city life. Kibbutz ideals seemed old-fashioned to them, and the unbridled way of life in the city more attractive. The economic success of city dwellers, forming a stark contrast to the kibbutz failure, also made the prospect of staying in the kibbutz less appealing.

In retrospect, the failure of the kibbutz experiment was a foregone conclusion. The slogan "give according to your abilities, take according to your needs" was incompatible with human nature. The Israeli version of Russian communism became as corrupt as the mother movement, except that in Russia changes were eventually made openly, whereas the Israeli kibbutz still attempted to maintain its image as an idealistic society. However, the economic crisis of the eighties burst the balloon and revealed the true face of the kibbutz.

HaRav Elchonon Wassermann, ztv"l, Hy"d, on Jewish Labor

How amazing it is today to read letters written by Maran HaGaon HaRav Elchonon Wassermann ztv"l Hy"d in 5694 (1934) to the leaders of Poalei Agudas Yisroel. At that time, members of chareidi kibbutzim were participating in a guard organized by Jewish workers who stood watch next to orchards whose Jewish owners wanted to hire Arab laborers, to prevent them from doing so. "Jewish labor" was a supreme value, and served as an end justifying all means to achieve it.

R' Elchonon published an open letter printed in Kol Yisroel on 22nd of Iyar: "I have seen with my own eyes: Jewish workers set up watchmen to prevent a Jewish orchard- owner from hiring non-Jewish workers, and some of the watchmen were members of Poalei Agudas Yisroel!

"Every person is entitled to do as he sees fit with his own property, although it is a mitzvah to prefer Jewish to non- Jewish employees if there is only a small difference between them, according to their worth (this only applies to Jews who are within "amisecho"). Anybody forcing somebody to take workers he does not want, using force and without anyone's backing, is committing a ma'aseh Sdom! I have no complaints against our `national heroes' who speak with their fists. It is to you I call out: please, my brethren, do not behave wickedly, do not imitate the worst amongst them!"

The author wishes to thank Rabbi Yaakov Gutterman, formerly economic adviser to Yahadus Hatorah (UTJ) and now mayor of Kiryat Sefer, for marshaling many of the necessary figures and documents and for finding time in his busy schedule to explain the complicated details of the budget, as well as Manof, the center for Jewish Information, who put their data bank at his disposal.

A Few Words about NPOs

by Yated Ne'eman Staff

Even though NPOs (nonprofit organizations) are more important to the chareidi community because much of the regular government funding goes through them to get to chareidi institutions, there are still plenty of NPOs for the general public. Even in this area overall, the chareidim do not lead.

A month ago Registrar of Associations Amiran Bogat submitted the first-ever list of State-supported NPOs to Minister of the Interior Eliyahu Yishai. This follows an internal report prepared by the Prime Minister's Office last year stating that state and local authorities spend a total of some NIS 5-6 billion annually to finance non-profit organizations and public institutions.

The list was also submitted to Minister for Regional Cooperation Tzipi Livni, who heads the State Comptroller ministerial committee. It will shortly be published on the Registrar of Associations website.

The list is broken down by the NPOs supported by each ministry. 3,251 NPOs receive a total budget of NIS 2.3 billion, at an average of NIS 556,000 each.

The list excludes universities, health funds and organizations that are not NPOs, and local authority support for NPOs. Consequently, the total amount of public funding for NPOs is considerably higher.

The figures show that the Ministry of Industry and Trade is the largest supporter of NPOs, with an average allocation of NIS 28 million per NPO; followed by the Ministry of Education (NIS 1.7 million); the Ministry of Science, Culture and Sport and the Ministry of Religious Affairs (NIS 540,000 each); the Ministry of Health (NIS 200,000); and the Ministry of Labor and Social Affairs (NIS 187,000).

The top State supported NPOs are Beit Berl College, the kibbutz movement's Oranim College, the Israel Export Institute, the Society for the Protection of Nature in Israel and the Mount Zion Yeshiva.

Meanwhile, the report from a year ago states that over six years there has been a 75 percent rise, in real terms, in the level of state funding for such organizations, from NIS 2.14 billion in 1992 to NIS 4.04 billion in 1998 (all figures in 1999 shekels). Local authorities, most of which receive significant financial support from the government, transfer an additional NIS 1-2 billion a year to the NPOs.

The document, prepared by Uzi Berlinski and Pnina Sofer from the comptroller's department of the Prime Minister's Office, also states that there has been a 70 percent increase in the number of organizations receiving public funds: 3,000 organizations received assistance in 1992, compared to 5,100 in 1999.

The recipients spend most of the money on administrative costs. The significant rise in the number of organizations receiving support thus "increases administrative and other ancillary expenditures, while reducing the available resources meant to serve the NPOs' purposes," said the report. It also warned that while the number of NPOs has risen dramatically in recent years, an effective supervisory mechanism has not been developed to deal with the increasing expenditures for this purpose.

Around 80 percent of the funds for NPOs come from the Education and Religious Affairs Ministries. In 1998, for example, out of the NIS 3.84 billion given to thousands of organizations, NIS 1.8 billion came from the Education Ministry and NIS 1.2 billion from the Religious Affairs Ministry. The Labor and Social Affairs Ministry transferred around NIS 106 million to such bodies, the Prime Minister's Office paid out NIS 124 million and the Health Ministry NIS 482 million.

The report also offers an overview of the State Comptroller's grave findings regarding NPOs in recent years, especially following the revelations concerning those NPOs which campaigned for former Prime Minister Ehud Barak during last year's election. It also reviews steps taken by various government ministries in an attempt to solve problems that have arisen, but concludes that only some of these problems have been resolved.

The authors of the report chose 1992 as the starting point for their research because a law was passed that year stating that the level of financial assistance granted to NPOs must be set annually in the budget and distributed according to fair and equal criteria.


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