In the shadow of economic and political disputes about cut backs to ministerial budgets – in light of war damages and the need to rearm the IDF ahead of the next round – the mid-year report on poverty was released by the National Insurance Institute (NII) on Wednesday as a reminder of the deep social problems in the country.
Over the last half of 2005, 1,631,000 Israelis lived in poverty, making up 26.2 percent of all families. In 2004 the percentage stood at 24.5 percent of all families and 21.8 percent in 2002.
While NII figures point to a relative steadiness in overall poverty data, poverty figures on children keep surging.
In addition, there are fewer elderly Israelis living in poverty due to a government decision to roll back cuts to pension allowances.
Ben-Shalom presents report. Worrying increase in poverty (Photo: Dudi Vaknin)
The report sounded the alarm over widening gaps between high and low-income families, a trend that could lead to damaging social schisms.
A combination of improved living standards and cuts to child allowances boosted the economic standing of rich families and dented prospects for economic stability among the poor.
In the last report issued by the NII, 1.58 million Israelis were said to be living in poverty – 24 percent of the population – 738,000 of which were children.
The report showed that 403,000 families lived in poverty – 20.5 percent of all families in Israel.
Recommendation made in the last report advised the government to cancel planned cut to welfare budgets for 2007, 2008, and 2009, while granting equal child allowances to large and small families.
Planned budget cuts in the 2007 state budget are likely to deepen the social crisis.
NIIS: Negative income tax
Dr. Yigal Ben-Shalom, NII Director-General, told journalist and economists at a news conference that State family allowances have been slashed by 15 percent since 2002 and child allowances by 47 percent since 2001.
"If (the government) reinvests NIS 1 billion (USD 227 million) a year for the next decade, I think this will reverse the trend. It is a possible and essential mission for the Israeli economy," Ben-Shalom said.