Israeli Prime Minister Naftali Bennett (R), Foreign Minister Yair Lapid (C) and Finance Minister Avigdor Liberman during the Cabinet meeting on the national budget

From farming to fire fighters: Inside Israel's great reform drive

Explainer: After heated debates regarding the budget for 2021-2022, the cabinet also approved a set of reforms to go into the Arrangements Law, addressing a multitude of issues including kosher certification, foreign produce imports, green energy and the housing and transport crises

Ynet |
Published: 08.02.21, 15:31
Alongside the approval of the 2021-2022 state budget on Monday, the coalition has also approved a slew of substantial reforms proposed by the Finance Ministry. These reforms touch a wide range of issues, including kosher certification, farming, public transport, housing and green energy.
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  • The Finance Ministry published and detailed its reforms months in advance of the coalition’s final approval, with some being the subject of controversy, criticism and public protest.
    9 צפייה בגלריה
    ישיבת ממשלה
    ישיבת ממשלה
    Israeli Prime Minister Naftali Bennett (R), Foreign Minister Yair Lapid (C) and Finance Minister Avigdor Liberman during the Cabinet meeting on the national budget
    (Photo: Reuters)
    The retirement age for women - which currently stands at 62 compared to 67 for men - will be gradually raised to 65 over the next 11 years, alongside measures meant to encourage adult employment.
    The coalition has also approved a series of tools meant to assist older women. This includes a 12-month entitlement of unemployment benefits for freshly unemployed older women, increasing the work grant for working women, a dedicated budget for vocational training for women, and increasing the amount of income that recipients of a senior citizen's pension are entitled to earn without offsetting their pension - meaning that those who earn up to NIS 6,000 will still receive a full pension.
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    הפגנת גמלאים במחאה על הפחתת הפנסיה בהשתתפות חברי כנסת
    הפגנת גמלאים במחאה על הפחתת הפנסיה בהשתתפות חברי כנסת
    Pensioners protest against a proposed reduction in their benefits
    (Photo: Moti Kimchi)
    The Finance Ministry also plans a substantial reform to Israel’s agriculture industry, a decision that sparked no small amount of protest and anger on part of Israel’s farmers who benefited from import barriers and quotas that elevated prices by more than 80% under the previous government.
    The reform includes the opening of the agriculture industry to imports, as well as direct government support and capital investments in farmers leading technological leaps in the country.
    Under the plan, taxes would be dropped or reduced on eggs and many other items of fresh produce.
    It also includes an easing of regulations on fruit and vegetable imports through the adoption of European standards, which the government expects will offer a significant increase in the range of products offered in Israel.
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    החקלאים מפגינים
    החקלאים מפגינים
    Farmers protesting against the upcoming reform in Israel's agriculture industry
    (Photo: Roee Idan)
    The government has also approved a series of reforms that would lead to the privatization of Israel’s kosher certification process in order to increase competition in a field currently monopolized by the Chief Rabbinate.
    Under the new plan, the Chief Rabbinate will serve as a regulator of independent organizations that will oversee the preparation of kosher food and have the authority to issue kosher certificates to businesses who meet the criteria.
    The reforms aim to address the corruption and poor standards that have plagued the system for years due to the Chief Rabbinate’s monopoly on issuing the certificates and its control over the inspectors who ensure that kashrut is being observed once a certificate has been issued.
    9 צפייה בגלריה
    An Israeli business owner holding his kashrut certificate
    An Israeli business owner holding his kashrut certificate
    An Israeli business owner holding his kashrut certificate
    (Photo: Gil Lerner)
    Public transportation will also be affected under the recently approved plan. Starting in 2024, all those entering Israel’s metropolitan areas - in Tel Aviv and Herzliya among others - during hours of heavy congestion will be required to pay a fee.
    The proceeds from this tax will be used to finance a five-year-plan to extend transportation infrastructure with the aim of alleviating the worsening transportation crises in Israel, and especially in the country’s central district.
    The government has also approved in the promotion of the metro project, which the government expects will help accelerate the economic and urban development of the metropolitan area, by providing those living and working in the area with quick, comfortable and reliable transportation.
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    קו 1 מבת ים לפתח תקווה
    קו 1 מבת ים לפתח תקווה
    The reforms aim to alleviate the worsening transportation crisis in Israel
    (Photo: Assaf Zagrizak)
    In order to reduce the cost of living and increase productivity, as well as to place Israel alongside other developed countries, the Finance Ministry also proposed to promote a plan to remove certain trade barriers on imports.
    This includes the removal of a unique Israeli regulation that is not enforced anywhere else in the world, which requires the preliminary inspection of most imports before their entry into the country - as well a the removal of the regulations prohibiting parallel importation of a variety of products - including electrical appliances, children's products, food, cosmetics and more.
    9 צפייה בגלריה
    עם ישראל פוקד את הקניונים והחנויות ביום הבחירות
    עם ישראל פוקד את הקניונים והחנויות ביום הבחירות
    Shoppers at the Dizengoff Center in Tel Aviv
    (Photo: Moti Kimchi)
    The new banking reforms will require various financial bodies to transfer customer information - with the customer’s consent - to innovative technological bodies, who will be able to show clients what financial services they use, exactly how much they are paying for them, and how much they can save if they switch to another provider.
    The Finance and Education ministries are also promoting a joint reform on education that will see school principals given more authority at the budgetary and pedagogical level, in order to give them more power to aid their students personally.
    The Finance Ministry has also proposed employment targets for 2030 for sectors with low participation in the workforce, and reforming the vocational training system so that the training will be of higher quality, both in order to increase the employment rate and labor productivity in Israel.
    9 צפייה בגלריה
    בית ספר בירושלים
    בית ספר בירושלים
    The new education reform seeks to aid school principals in helping their students and adhere to their unique needs
    (Photo: EPA)
    The government is also seeking to advance the Regulatory reform, which will be based on risk management, reliance on international standards, promotion of a competitive economy, reduction of the cost of living, and regulation adapted to small and medium-sized businesses.
    In an effort to solve both the housing crisis around the country and the issue of large swaths of land being left unused by their owners, there is a proposal to allow up to 50% of all areas approved for businesses near residential neighborhoods to be used for small apartments (micro units).
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    People living in tents in protests of the housing crisis, Tel Aviv, 2015
    People living in tents in protests of the housing crisis, Tel Aviv, 2015
    People living in tents in protests of the housing crisis, Tel Aviv, 2015
    (Photo: Moti Kimchi)
    A reform is also planned for issuing business licenses. Currently, business license terms are set by seven different regulators, who set the terms without coordination and without examining costs.
    In order to amend the situation, a reform was proposed to establish an organizing committee for business licensing, which will work to reduce the costs of licensing requirements, shorten licensing procedures and bring licensing requirements in line with international standards.
    Another planned reform is in the field of cannabis exports, and the removal of certain legal barriers that impact the growing industry in Israel. The decision will allow Israeli cannabis companies to expand and diversify their export options, and will serve to push the development of the cannabis industry in Israel.
    The government is planning to promote the digitization of government work and thus improve public services, as well as to encourage and assist citizens and businesses to make use of technological advancements.
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    קנאביס עובדים בטרימינג בשיח שריד
    קנאביס עובדים בטרימינג בשיח שריד
    The Cannabis reform will allow Israeli cannabis companies to expand and diversify their export options
    (Photo: Mor Bornstein)
    The government is also planning a reform of firefighting regulations. At present, fire regulations are determined by the commissioner of the National Fire and Rescue Authority. The government's proposal seeks to adapt these regulations to Western standards, adding that as of 2026, all the Commissioner's provisions will be enshrined in regulations approved by the Knesset.
    In order to encourage the transition to clean energy through efficient and green electricity generation, the Finance Ministry is promoting a series of regulatory relief in the field of green electricity, including preparation for the transition to electric transportation in both the civilian and government sectors.
    A purchase tax will be levied on sugary drinks, containers of fruit juices and concentrates and powders for making sweet drinks, in order to encourage a reduction in the consumption of sugary drinks can lead to health problems.
    Purchase tax will also be imposed on disposable utensils containing plastic, in order to reduce the environmental damage involved in their use and production.

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