CABINET COMMUNIQUE

October 18, 1996

(Communicated by the Cabinet Secretariat)

At its weekly meeting today (Friday), 18.10.96:

1. The Cabinet appointed Motti Ayalon as Director of the Finance Ministry Customs and V.A.T. Department, to replace Aryeh Zeif, who is retiring. During the past few years, Mr. Ayalon has served as Deputy Director-General of the Customs and V.A.T. Department.

2. The Cabinet appointed Dr. Karni Jabotinsky-Rubin as Public Complaints Commissioner in accordance with the State Health Insurance Law. This appointment has also been approved by the Health Council. Dr. Karni Jabotinsky-Rubin is a senior head physician at the Geriatric Dept. at the Mental Health Center in Jerusalem’s Talbiyeh neighborhood.

3. The Cabinet instructed the Directors-General Committee on Local Assistance to operate as a special staff to deal with problems of social welfare, employment, industry and infrastructures in Israel’s development towns.

The staff will report on its work to the Ministerial Committee for the Advancement of Development Towns and Areas, chaired by Foreign Minister David Levy. It will coordinate an interministerial effort to achieve progress for development towns, and will prepare a special operational program to assist these areas. The Chairman of the Inter-Ministerial Committee will brief the Cabinet on the results of the staff’s work.

Foreign Minister David Levy initiated the discussion on the issue in light of this week’s events at the Kitan plant in Beit She’an. Minister Levy said that the government must make a special effort to give concrete expression to the need for action on, and show consideration for the problems of the residents of development towns.

Industry and Trade Minister Natan Sharansky told the Cabinet that he has adopted a new procedure, according to which any company which receives government benefits must act fairly and respectfully towards its workers.

4. The Cabinet adopted the recommendations of the Inter-Ministerial Committee which dealt with the damage caused by the fire which struck Kiryat Anavim and the surrounding area. The committee considered the scope of the damage which the fire had caused to communities which are not covered by insurance.

The committee’s recommendations, which were approved by the Cabinet, establish principles for providing compensation for damages according to the criteria which were previously set for the fire at Shoresh. These include:

a) providing credit for financing the reconstruction of buildings; and b) providing development grants for repairing damage caused to basic infrastructure.

5. The Cabinet has decided to instruct the ministers of Health and Finance to present an emergency order to the Special Ministerial Committee on the Economic Arrangements Law to organize the approach to accounting between the health funds and the general hospitals, regarding services provided by the hospitals to the health funds in 1997. The accounting system will determine that the health funds will pay the hospitals according to the cost of a day of hospitalization, ambulance services, and differentials up to a ceiling on the amount which is 2% above the amount determined by the capping agreement. Beyond the ceiling, the funds will pay half of these costs. This instruction will be re-assessed during the second half of 1997.

6. The Cabinet has decided to submit an amendment to the State Health Insurance Law for approval by the Ministerial Committee on the Economic Arrangements Law, in order to ensure that the management of the health funds will have no connection to the field.

7. The Cabinet authorized the Prime Minister to make a decision in accordance with the views of the Cabinet concerning the proposal by the National Infrastructures Minister to rescind the Cabinet’s decision regarding the repeal of the Law on Free Manufacturing Zones in Israel.

8. The Prime Minister notified that in accordance with his authority under Basic Law: The Government, he has decided to appoint Minister Moshe Katzav to be responsible for the unit which advises the Prime Minister on Arab affairs, and that he will assume all of the authority and the responsibility of the Prime Minister’s Advisor on Arab Affairs.