The Finance Ministry's annual wage report was presented on
Monday and it showed that hundreds of employees still enjoy
sky high salaries, while cutbacks are made all across the
board. There have been attempts to reign these excesses in
for several years, but there is still work to be done.
The Treasury has guidelines and limits, but the wages of the
highest paid officials exceed them. For the second year in a
row, the financially strapped Kupat Holim (HMO) Clalit took
first place for high paychecks, with the average monthly
management salary being almost NIS 77,000. The average salary
of all workers in Israel is about NIS 7,000 ($1575).
The overall highest salary was earned by surgeon Prof. Azzai
Appelbaum, director of heart surgery at Soroka Hospital in
Beersheba. He is an employee of the Clalit Health Fund who
cost the state a total of NIS 141,454 a month including a
gross monthly salary of NIS 108,000. Yuval Rachlevsky, the
director of the Treasury's Wages Department, explained that
he considers this a special case. "Some stars deserve a
special salary level," he said. "In any case, his salary was
reduced in 2003, just as all other senior employees in the
public sector."
Overall, the Bank of Israel had the highest paid officials.
Other perennial big spenders of taxpayers' money are the
Israel Port Authority, Israel Aircraft Industry, Israel
Electric Company and the universities.
At the Bank of Israel (BOI), twenty-two senior officials get
NIS 65,000, 115 earned NIS 41,000 or more, and the average
gross monthly average salary for the central bank's 800
employees was NIS 21,000. Even the librarian's paycheck is
NIS 46,000. The report said that 34 of these workers received
an increase of more than 7.5 percent in 2002, exceeding the
salary cap that year and leaving the central bank in
violation of the wage limitation for the fourth year in a
row.
The BOI stated in response that employees' salaries were set
in wage agreements in accordance with collective civil
service agreements and the law, which the director of wages
enforced. It added that 90 percent of its executives held
university degrees, and half had either MAs or Ph.D.s. In
addition, 90 percent of executives had an average of 30 years
seniority, which affected their salaries. Hinting at salaries
at the Ministry of Finance, including Rachlevsky's, the BOI
said the salaries of civil servants hired under personal
contracts should also be published.
The BOI further noted that the bank's payroll has been cut by
35 percent since 1987 and that 200 jobs were cut in the last
four years alone. "This reduction . . . is very exceptional
considering the overall growth of the public sector."
The Treasury report detailed salaries at 674 government
bodies employing 285,000 people. It showed that 20 percent of
them exceeded wage limitations, compared to 16 percent in
2001. Total salary costs reached NIS 43.3 billion in 2002,
and the number of jobs increased by 1.5 percent.
Over the last five years, the Treasury wage director has
intervened about excessive wages in 1,000 cases, the Treasury
said. The estimated savings from the interventions were NIS
250 million, plus millions more from the deterrent
effects.
Many municipal authorities also pay their senior workers
hefty salaries even though some of them are so mired in debt
they have not paid their employees for several months. While
most of Kiryat Malachi's employees have not been paid for
over 6 months, senior staff are getting salaries of over
20,000.
One shift manager at Israel's ports gets NIS 66,000. Twenty
of his colleagues earn over 50,000, while 240 workers get
over 35,000.
A spokesperson for the Electric Company noted that the
company's salaries no longer top the list and claimed than no
illegal payments were found on their payroll. "The salaries
of senior employees are influenced by their seniority, which
is part of the collective agreement that is used in the
public sector," he explained.
The report divulged the title of the highest wage earners in
each government company but it did not disclose names.
Clalit, the largest of the four health funds, employed 1,046
people who earned more than NIS 35,000.
Yitzhak Peterberg earned the second highest gross salary --
NIS 86,000. He served in 2002 as CEO of the Clalit Health
Fund. He is now CEO of Cellcom where he probably earns more.
Salary costs for three employees at the Maccabi Health Fund
were more than NIS 100,000. One Meuhedet employee cost more
than NIS 100,000.
The highest salary at Israel Electric, NIS 66,634 a month,
was for an engineering projects manager. IE's CEO was paid
NIS 43,743, yet 165 IE employees earned more than he and had
an average salary of NIS 51,229. Bezeq CEO Ilan Biran cost
NIS 59,326 a month, and Bezeq spokesman Yotam Yakir cost NIS
43,119. The average gross salary for Bezeq employees was NIS
12,000.
Mekorot's chairman and CEO were paid more than NIS 49,000,
while 33 of its employees earned more than NIS 39,000. The
average gross salary at Mekorot was NIS 13,400. Military
Industries' CEO earned NIS 50,012, and 15 of its employees
earned more than NIS 37,133.
Israel Aircraft Industries' CEO earned NIS 65,404, and the
average gross salary of its employees was NIS 15,800. The
chairman of El Al cost the state NIS 58,320 a month.
Of all the religious councils, the highest paid employee was
a Netanya general manager whose salary was NIS 30,049, while
the second-highest salary belonged to a Jerusalem division
manager, who received NIS 27,867.
Other salary costs include Betzalel Art Academy's general
manager at NIS 81,963. Tel Aviv University's legal adviser,
the highest paid at the university, cost NIS 70,913 a month,
while 79 faculty members and employees earned a gross salary
of more than NIS 33,000.
More than a few local authorities' deficits are a direct
result of exorbitant salaries and wage-related excesses, Eti
Gabbai, head of the Treasury wage division enforcement unit,
said.
In a recent surprise audit, almost all of the Rechovot
Municipality's 320 employees were discovered to be wage
gougers, Gabbai said. She said the municipality breached a
contract signed in March 1999 between the Histadrut, the
Local Government Authorities, and the Treasury's wage
director that set a standard yardstick for determining wages.
Gabbai said Rechovot paid its workers eight different types
of overtime pay, provided an 18-month "acclimatization
period" for new employees, and offered extravagant pension
plans.
She said four high-ranking employees were forced to lower
their salaries by NIS 150,000 and return NIS 400,000.
Pensioners were forced return hundreds of thousands of
shekels that saved NIS 2m. in actuarial terms.
According to Shmuel Nachmani, a senior member of the Treasury
wage division, exorbitant wages, coupled with a low level of
municipal tax (arnona) collection, especially in local
authorities populated by Israeli Arabs, is the major cause of
budget deficits.
"Tax collection in Arrabe [in the Lower Galilee] was almost
nonexistent," said Nachmani. "And even after employing an
external debt-collection agency, they managed to raise it to
just 20 percent."
He said a surprise audit discovered that five high-ranking
officials in Arrabe were receiving excessively high wages.
They were asked to return NIS 650,000 and to cut salaries by
NIS 250,000.
Other problematic local authorities and municipalities
mentioned include Kiryat Shmona, Petach Tikva, Rosh Ha'ayin,
Rishon Lezion, Ramat Gan, Ramat Hasharon, Ra'anana, Netanya,
Savion, and Acco.
