GUIDE TO POPULIST LEGISLATION IN ISRAEL
Yossi Laster
A number of social welfare
bills were introduced into the Knesset by members of the “social welfare lobby”
in 1998. This legislation is likely to
cost the taxpayer billions of shekels. The
passage of populist legislation has been facilitated by the poor understanding
of economics among most Knesset members and a ruling coalition that is patched
together from numerous small parties.
The Even-Shushan Hebrew dictionary defines populism as “a political
philosophy which favors providing for the needs of the masses and supports a
more egalitarian distribution of income and power.”
In 1998, for example, a bill
proposing free compulsory education for children over the age of three was
presented by Tamar Guzinsky (Hadash), Anat Maor (Meretz), and Shlomo ben
Ami (Labor) and passed in its first reading in the plenum. Also approved was a bill proposed by Ran
Cohen (Meretz) calling for the government to sell thousands of public housing
units to low-income tenants for a nominal price.
It is important to analyze
the mechanism by which these bills are passed.
This will further our understanding of Knesset members’ motives in the
legislative process and the ease with which laws are passed that cost the
taxpayer billions of shekels. We will
first examine the bill for free compulsory education for children over the age
of three. The justification offered for
the bill is that low-income parents are unable to afford nursery school.
Nursery Schools in Israel
There are three types of
nursery schools in Israel: private,
public (municipal), and semi-public, which are run by subsidized
organizations. According to data from
the Income Tax Authority, there were 2,600 private nursery schools operating in
1997. According to data from the
Ministry of Education, there were 10,500 public nursery schools for children
aged three to six. In addition, several
hundred semi-public nursery schools are run by women’s organization such as
Wizo, Naamat, and Emuna.
Compulsory education starts
from age five in Israel; therefore all children aged five to six attend free
public kindergartens. Parents are able
to choose between public, semi-public, and private nursery schools for children
aged three to five. However, none of
these choices are free of charge. The
following tables present the distribution of children and nursery school
attendance rates by age group (from data contained in the 1999 budget
proposal):
Table 1
Distribution of Children by
Age
(Jewish population, in
thousands)
|
Year |
1996 |
1997 |
1998 |
|
Three |
82.5 |
83.1 |
84.7 |
|
Four |
80.0 |
87.5 |
83.9 |
|
Five |
81.0 |
81.0 |
84.3 |
Table 2
Attendance Rate at Nursery
Schools (including Private)
by Age (Jewish population)
|
Year |
1986 |
1989 |
1994 |
|
Three |
92% |
96% |
95% |
|
Four |
99% |
99% |
99% |
|
Five |
95% |
95% |
95% |
The Legislative Mechanism - Nursery Schools
As stated above, compulsory
education begins at age five. Since the
early 1980s, several attempts have been made to lower the age to three. Following is a survey of the history of nursery
school legislation:
1984 - The government’s attempts to take control of the
nursery school system began, rather symbolically, in 1984. In that year, amendment no. 16 to the
Compulsory Education Act was approved.
It lowered the starting age for compulsory education from five to three
years of age.
1984-1996 - Between 1984 and 1996, enactment of the amendment
was delayed each year by means of the Arrangements Law which is used to
regulate the spending of the State budget.
If the application of a certain law involves an inordinate expense, the
Arrangements Law can be used to delay it.
Each year, both the left and right wing parties in the Knesset have
concluded that the government does not have the means to finance this
amendment.
1996 - Tamar Guzinsky, chairman of a Knesset “Committee
for Infants,” proposed a bill to immediately enact the amendment. The bill was signed by 46 Knesset
members. It passed a preliminary
reading but was once again frozen by the Arrangements Law.
1997 - The bill passed preliminary reading again in
1997. Two similar bills were presented
by Anat Maor and Shlomo Ben Ami, which also proposed to lower the age of free
compulsory education below five.
1998 - In 1998, the legislators’ attempts to take
control of the nursery school system reached a peak. We will examine the events of that year in detail.
Knesset members increased
their efforts to establish a government monopoly within the nursery school system. In July 1998, the Education Committee of the
Knesset discussed the new bill prior to its first reading. Present at the discussion were
representatives of the Ministry of Education, the Organization of Private
Nursery Schools, “Mashov”: a parents’ group supporting free nursery schools,
the Child Welfare Association, and the Ministry of Finance as well as child
psychologists. Of the three proponents
of the bill, only MK Guzinsky was present.
No research findings, economic or statistical, were presented regarding
the number of low-income families in Israel and no attempt was made to justify
free compulsory nursery school for the entire population. Little attention was paid to the claim made
by the representative of the Organization of Private Nursery Schools, that the
bill would lead to widespread bankruptcy among private nursery schools. The representative of the Ministry of
Finance pointed out that the cost of the bill to the taxpayer was estimated at
NIS 500 million for the establishment of nursery schools and NIS 750 million
per year for operating costs. Two weeks
after the discussion, the Education Committee approved the bill for its first
reading.
In September 1998, Minister
of Education Yitzhak Levi (National Religious Party), proposed a bill for free
compulsory education from age four. In
an interview with the Ha’aretz newspaper on September 25, he explained
that the motive behind this bill was to prevent the spread of cheap nursery
schools sponsored by Shas, the National Religious Party’s competitor.
In December 1998, a further
discussion was held by the Education Committee. The representative of the Ministry of Finance claimed that
according to data from the Central Bureau of Statistics, more than 95 percent of
children aged three to five already attend nursery school (see table 2) making
the proposed bill unnecessary. The
representative of the Ministry of Education claimed that the figure was only 68
percent. The chairman of the Committee,
MK Emanuel Zissman, closed the discussion with the following statement:
It is true that most Jewish
children attend nursery school, but it is the underprivileged sectors – the Arab, Beduin and new immigrant
communities – that have low nursery school attendance. This bill will reduce inequality among Israeli
children and will reduce poverty, now and in the future.
Following the discussion,
the Education Committee approved the bill for its second and third readings.
In summary, the above survey
demonstrates that the decision making process for the Free Compulsory Education
bill, with a price tag of more than one billion shekels, was amateur. Two of the proponents of the bill were not
present at the discussion; no serious study was conducted regarding the actual
number of needy families; no attempt was made to reconcile the difference
between the Ministry of Finance’s claim that 95 percent of children attend
nursery school and the Ministry of Education’s figure of 68 percent; the
implications of the bill for the private nursery schools (possible bankruptcy)
were ignored as was parents’ loss of freedom in choosing a nursery school and
nursery school teacher; and finally, no alternatives were presented to help
only low-income families, such as the system of vouchers used in the U.S. which
assists needy families specifically rather than subsidizing all families
regardless of income.
Public Housing in Israel
Another example of populist
legislation is the Public Housing Bill, which is meant to provide housing to
the underprivileged sectors of the population at a nominal price. The eagerness of the government and
individual Knesset members to show personal achievement in this area created a
close “legislation race” between two similar bills: one proposed by MK Ran Cohen (Meretz) and the other by the
government. Each side in the
“legislation race” has tried to torpedo the other’s bill and gain credit for
any supposed economic benefit to the public.
The government has been
assisting low-income families with subsidized rents since the 1950s. There are presently seven public housing
companies holding a stock of 112,000 apartments that are rented out to 173,000
low-income tenants. Some of these apartments are owned by the government while
the rest belong to the public housing companies. Monthly rents for the underprivileged tenants in these apartments
range from $19-$84 depending on the level of support. According to Ministry of Finance data, the implicit subsidy to
the group paying $19 per month alone reaches $160 million annually.
The public housing system
has received a great deal of criticism over the years. The State Comptroller warned of serious
management problems such as disorganization and bureaucratic red tape within
the public housing companies and the granting of housing benefits to those who
do not qualify. In January 1997, the
government decided to investigate the issue and appointed MK Meir Sheetrit
(Likud) to lead the investigation. The
issue had previously been studied by the Leon Commission whose work was
interrupted by a decision to transfer responsibility to the Gadish Commission
which had been working on the same issue simultaneously. In July 1998 the government received the
recommendations of the Gadish Commission and decided to sell the apartments to
their tenants at a reduced price. The
criteria were to be the period of residence, number of family members, and
location. The discount on the price of
the apartment was graduated, reaching a maximum of 70 percent in the central
region of the country and 75 percent in outlying areas. The total cost of this subsidy is estimated
at over $2.5 billion.
At the same time that the
government was attempting to solve the public housing issue, additional bills
were presented in the Knesset, the most prominent of which was a bill proposed
by Ran Cohen. It proposed that anyone
who had lived in public housing for 5 years could purchase his apartment at 15
percent of its estimated value. The
Economics Committee’s discussion of Ran Cohen’s bill was carried out
simultaneously with the government’s dealing with the issue and a close
“legislation race” ensued. In mid-July
1998 the Economics Committee approved MK Cohen’s bill for its second and third
readings. The July 16 and 22, 1998,
issues of the Globes newspaper described what transpired in the
Economics Committee discussion:
Coalition Chairman MK Meir
Sheetrit, who this week passed a different plan in the government, tried to
cancel the vote but stormed out of the meeting following a shouting match when
he realized that he did not have a majority.
He described the event as scandalous.
MK Sheetrit made a formal
complaint against MK Avi Yehezkel to Knesset Speaker Dan Tichon. He claimed that Yehezkel did not allow him to
discuss the clause outlining the calculation of discounts. Globes then goes on to describe MK
Yehezkel’s response:
Yehezkel intends to present
the minutes of the meeting to the Chairman of the Knesset, according to which
Sheetrit threatened to make “trouble” or to “disrupt” the committee if his
proposal was not passed.
In summary, the legislative
process surrounding the public housing bill has involved members of Knesset
fighting each other with every means available, not out of objective economic
considerations, but in order to present themselves as the initiators of the law
and the source of supposed economic benefits, which are, in truth, costs. In an article printed in Globes on
October 15, 1998, entitled “A House for Every Voter,” Levi Morag summarizes the
true motive behind the “legislation race”:
“It is a well-known secret that the vast majority of public housing
tenants are Likud supporters and voted for Netanyahu in 1996.” And furthermore: “...the coalition government cannot come to terms with the idea
of the opposition granting real benefits to the Likud electorate in the
area of public housing.”
Summary
In a rational country the
legislative authority is supposed to serve the taxpayer and account for its
actions. In Israel, however, the
legislator does not have to account to the taxpayer either for its activities
or for the decision making process. The
legislator’s disregard for the taxpayer is expressed in the lack of professionalism
exhibited in the legislative process and the absence of research, statistical
data, and economic analysis. Questions
of professionalism also arise in discussions of the State budget. Globes reported on November 20, 1998,
that MKs do not show up for meetings and discussions on the health and
transportation budgets that were allocated two days of discussion time were
concluded within two hours (Zvi Lavi, “Who Killed the Finance Committee?”).
The attempt to call a
proposed bill “Free Education,” when it would cost the taxpayer billions of shekels,
is an attempt to mislead the public and is an insult to their
intelligence. However, the main damage
from populist legislation, which is disguised as “aid to the needy,” is the
State’s control of areas which should be left to the family or the free
market. In this regard, the State can
be likened to someone who helps you
across the street but won’t leave you alone once you have crossed.
Yossi Laster is an associate
fellow at the Institute for Advanced Strategic and Political Studies in
Jerusalem and Washington, D.C. and directs the annual research projects of the
IASPS Koret Fellows. He was until
recently the economic advisor to the Organization of Private Kindergartens in
Israel.