Barry Topf

Have they no shame?

Amongst the most outrageous acts of this government has been to increase subsidies, to an unprecedented extent, to ultra-Orthodox yeshivas and yeshiva students. No one knows exactly how much money has actually been promised to the Haredi parties, since there are numerous methods used to hide their true extent. With the country at war in one of the worst crises in our history, with the economy facing serious problems, the disproportionate payments to the   Haredi sector, who overwhelmingly are not bearing the security burden, have become even more outrageous.

Why have the Haredi political leaders and their public not offered to waive and return at least part of the massive funding that they obtained under duress from a desperate prime minister? Along with the terrible human costs of this war, there will be urgent and enormous expenses as well.  Homes, farms and entire settlements have been destroyed; thousands are homeless, their lives upended, their livelihoods disrupted. Hundreds of thousands of reservists have been mobilized. The direct military costs and indirect costs to the economy of war will be overwhelming. Taxes will rise, the national debt and public services- health, education and social expenditures will be cut back.

While reservists are mobilized and potentially risking their lives defending the country, volunteers from all segments of society are contributing to the war effort, and Jews and others abroad are contributing what they can, one sector is conspicuously not doing its share- the ultraorthodox. While some members of the Haredi community are trying to help, the community as a whole-and its leaders- are not doing their share.

Well before the war, it was clear that the Haredi reliance on the working public to support them had become an unsustainable burden. Their claims on the government budget, by means of “coalition agreements” (otherwise known as political payoffs and patronage) as well as other demands, reached unprecedented levels The constellation of a prime minister who was desperate to form a government, no matter the cost and damage to the country, along with the Haredi community’s sense of entitlement and lack of restraint, produced a budget which even under normal circumstances would have been disastrous for the country Massive sums were earmarked for unproductive and economically indefensible purposes, on a sectorial basis.

It is difficult to know exactly how much the Haredi parties obtained, since the budget is far from transparent.  A variety of methods are used to conceal and obfuscate funding of the Haredim -sectoral coalition agreements, regular budget allotments, “special transfers” and more.  For example, in the original 2023-2024 budget, “funds for sectoral uses of coalition partners” was NIS 14 billion, compared to a total budget of NIS 12.4 billion for hospitals and a similar amount for higher education. After the budget was adopted, additional hundreds of millions of shekels were transferred to yeshivas, yeshiva students, and Haredi (unsupervised) educational systems. This was in the framework of coalition agreements and does not include the larger sums in the regular budget,  which saw substantial increases to the haredi share.

The funds to narrow sectoral groups must be used for urgent needs, like rebuilding the Gaza border communities and rebuilding shattered lives. Our taxes- paid disproportionately by the very same segments of the population who are also bearing the military burden – should be used for the benefit of the entire population, and not for those self-segregated communities which managed to leverage political influence on a weak government.

Haredi Jews are 10.9% of the population yet pay only 2.2% of income taxes; secular Jews are just 33.3% of the population yet paid fully 62.1% of income taxes. The average Haredi household received NIS 2,276 in monthly net transfers in 2021, while the average non-haredi household paid Nis 2,206.

In addition to not bearing the burden of defending the country, the burden of financing the country is markedly unfair, and the war is worsening that inequality.  The war has already required the ultimate sacrifice from many brave Israelis.

We need to stop subsidizing those who voluntarily choose not to work.  We have to stop paying for educational systems which do not prepare students to be productive citizens. We must stop paying salaries to religious functionaries, who often foster divisiveness and ethnic resentments.

This government has been marked by incompetence and corruption. Yet for sheer chutzpah the Haredi refusal to allocate the budget as needed sets a new low even for this government. The Knesset finance committee, which convened frequently and quickly (even during recesses) to approve every distribution of hundreds of millions of shekels that Haredi politicians demanded, has barely met since the war began, and has not taken any meaningful decisions despite the urgent need to mobilize the economy.  Although there are reports that some coalition funds will be used to pay for evacuation of residents of the north-according to news reports, just 2% of the coalition funds– this too is a disgrace. What is needed is an overhaul of the entire budget to meet the needs of all Israelis, according to urgent national priorities.

Astonishingly but not surprisingly, the Chairman of the Finance Committee, MK Moshe Gafni of the United Torah Jewry party, who has long ruled the committee with an iron hand to extract benefits for his base, has delayed previously approved allocations to use as leverage to prevent any cuts in coalition funds going to the Haredi community. While Israelis are dying, injured, grieving, homeless, Gafni’s highest priority is ensuring enlarged benefits to yeshiva students.

The resources saved from reallocating coalition (and other) funds can be used for education, health, – and defense. Why, then, aren’t Haredi politicians asking to relinquish the money they wrested from an incompetent and failed government, so it can be used for urgent purposes?  Why are the Prime Minister and the Minister of Finance not demanding it? Will the Haredi parties continue to stand by idly, while the rest of society bears almost unbearable burdens?  Where is their shame? And where is the outrage from the rest of us?

About the Author
Barry Topf was a member of the Bank of Israel’s senior Management from 2001 until 2013. He was a member of the Monetary Policy Committee in 2011-2013. As a consultant for multinational organizations, he has advised more than 25 countries on macroeconomic and monetary policy.
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