Kahlon: Privatization was too open-handed

After bending Israel's cellular providers, communications minister gives social protest some tailwind, says 'State should intervene in housing, education, health and welfare without apologizing'

Tomer Zelzer, Gilad Nass|Published: 08.24.11 , 15:08

In a special interview held ahead of the Calcalist's Central Economic Conference to be held on September 7, Communications Minister Moshe Kahlon explicitly conveys that "in issues of housing, education, health and welfare – the government should intervene without apologizing or hiding.

"All of the privatizations that were performed should be probed: Were they advantageous? Were they beneficial to the citizens? Whatever is found to be unsatisfactory must be halted. Whatever is damaged must be fixed."

Are there overly powerful tycoons in Israel ?

"Of course there are groups which hold tremendous power in their hands. There are 10-20 groups which hold 50% of Israel's capital. This is indisputably an affliction that must be treated and I hope that the social reform committee finds a solution.

"It won't be an easy job and it'll take a while – no one really expects the cross holdings in real and financial companies to be broken up by tomorrow morning – but eventually this will happen."

What about health, education, welfare? These are areas in which increasing competition will not solve the crunch.

"A state of affairs in which the rich have healthcare and the poor don't must be eradicated; a situation in which the rich have education and the poor don't must be amended. The same goes for roads for rich and poor.

"Israel cannot tolerate this state of affairs and if it does not come to a head now – it will in the future. The lower echelons of Israel's society will have to get direct aid from the government."

Kahlon stresses that "the privatization that was performed in Israel was too open-handed and now we need to chart a different course." "It's not all about money like the Ministry of Finance would like to believe. Caring for society's elderly is not to be judged in terms of money."

Do we need an ideological reform like the protestors demand?

"I don't think of it in terms of ideology but rather in terms of priorities. I believe in a free market economy but regulation is part and parcel thereof.

"I think that right now we are talking about a statement of intent as regards the government's change of course insofar as competition in the economy. Look, the truth is always somewhere in the middle – it's not in 'piggish capitalism' nor is it in hallucinatory socialism – these approaches are obsolete. Each case should be examined individually."