Speech by Prime Minister Ariel Sharon at a special Knesset debate on social gaps
(Translated from Hebrew)

January 19, 2004

Mr. Speaker,

First, I would like to thank you for giving me the opportunity to appear here again, in continuation of last week. I do not know if this continuation will become a daily occurrence. However, I am please to be able to explain to the members of the Opposition, who have been blind to the activities of the Government.

Members of Knesset, Good Evening,

For the last three years, the State of Israel has been confronted with a difficult economic crisis.

There are two ways of dealing with a crisis the first is to lower our heads, and wait for it to pass. The second is to use the crisis: learn to correct mistakes made in the past (there are many, many mistakes that we are still suffering from today), learn the lesson, become more efficient, and utilize the crisis as a springboard to a more successful future. The Government I head has chosen the second option.

The strategy we chose, the courage to face the difficulties, has already proven itself. The Government policy reflects and creates stability in the markets inflation is low, interest rates have fallen, currency is stable, and the stock market is rising. Foreign investment in Israel between 2002 and 2003 has doubled. El Al stocks were offered on the stock market, Bezek and Zim are no longer Government Companies. We are implementing structural changes in Mekorot. The private sector has expressed complete confidence in this policy and in the determination of the Government and the Minister of Finance, who is leading the revolution, to enact this economic policy.

The Government’s policy has encouraged the Bank of Israel to lower interest rates. I attribute great importance to the influence of this move for reducing interest rates on mortgages. Today, young couples and people purchasing apartments are paying hundreds of shekels less, thanks to the lowering of interest rates.

This is a transitory period, and as such, it is, of course, difficult. Naturally, during this period, the hardships of many citizens are increased. These troubles are severe and touch our hearts. We are doing our utmost to help wherever we can. However, we must understand, that if we want an economically strong Israel, we must endure this transitory period. We cannot continue providing resources for social needs if there is no investment in increasing these resources.

These are processes that require time and patience frequently a lot of patience, but eventually a gradual improvement will be felt in every home in Israel. The forecasts show that in 2004, after three difficult years, there will be positive per capita growth in the economy. The worst is behind us.

Members of Knesset,

This Government does not believe in transferring money to people who can work. One could disagree on this point, one could criticize us for this. However, it should be understood: this is our position, and we will stand by it. Allowances will only be allocated to those who are truly unable to work: the disabled, the elderly, and those who have limitations. Those who can work must be provided with the necessary tools to work in the best possible conditions and achieve their full potential for their benefit and for the benefit of the economy. The situation in which we nearly found ourselves, that of a society supported by allowances will never return.

The employment rates in Israel for the employed age groups is ten percent lower than the average in developed countries around the world. Some estimate the damage caused to us as a result of this at $9 billion in our annual product. Of course, we must take into account that there are soldiers, there are those that serve, there are those that do not work. Our goal is to reduce this gap as much as we can. Whoever can work will go to work.

During the past three years, we have laid the foundation for the economic reform that Israel must undergo. The first thing we did was a huge revolution in the field of infrastructure. In every country in the world people drive for an hour, an hour and a half to work. There is no reason that we cannot create the conditions for every citizen in Israel to, every day, arrive quickly and efficiently to their place of employment that are tens of kilometers away from their home. We have already begun this process. We have made cities that seemed in the past cut off into cities that are close to the center. We have laid out and will continue to lay out a net of railways and advanced roads across the country.

The Government and the Knesset approved an investment of NIS 24 billion over the next five years, for the new railroad company that was established, in order to build railways to the Negev and the Galilee. We are already investing in bettering the roadways. A week ago, we inaugurated the central section of Highway 6, named after the late Yitzchak Rabin, that is a main transportation artery and connects the northern section of the country with its south and center. These two networks railways and roads will transform the country into one employment area, and at the same time allow people to have a higher quality of life in the peripheral regions, enabling them to reach their workplace as quickly as possible.

I can still remember the looks of scorn I received when, as Minister of Infrastructure, I decided to extend the railway to Beer Sheva. Well, today there is a train to Beer Sheva, and it makes the trip 36 times a day, and I, as Prime Minister, instructed to double the track to keep up with demand.

I also encountered those same scornful looks when I decided to enable passenger travel on the train to Dimona. It could have already begun to operate, we are simply connecting it to the station at the University in Beer Sheva, otherwise it would have already begun to operate this year. I was told it would be unprofitable, that no one would travel, that it would not work. I want to tell you: there will be a train to Dimona, and the residents of Dimona will be able to travel to Beer Sheva and Tel Aviv quickly. There will also be a train to Sderot, to Netivot, to Ofakim (that is in the advanced planning stage), to Carmiel, to Afula and to Beit Shean. We have decided so, and are investing all our efforts to make it so, and Mr. Speaker and members of Knesset, so it will be.

The significant improvement in the road and rail systems can bring about a much higher mobility of workers and goods. In order to take advantage of this, the Vice Prime Minister and Minister of Trade, Industry and Labor is leading the movement to amend the law to encourage investment. It is our intention to include an investment path for large international factories in the peripheral areas that will include unprecedented tax benefits, thereby creating jobs in these areas.

In addition to the efforts invested in bringing the periphery closer, we have also started tackling the labor market. I would like to say something about foreign workers. My heart also breaks when I see people whose only desire is to earn a living in a foreign country. It is important to understand: they are not our problem. Our problem is those Israelis who are unwilling to go to work. We will not be able to continue forever when citizens of this country live off of unemployment allowances and foreign workers build the country in their stead.

A country with 280,000 unemployed citizens cannot allow itself 300,000 foreign workers. We decided to put an end to this situation. The immigration police has already deported 80,000 foreign workers. At the same time, we have stiffened the criteria to receive minimum wage guaranties, so that whoever can work in jobs that have opened up, will do so.

The Government is also acting to lower taxes, thereby encouraging going to work. Only last week, the Government approved, in accordance with the proposal of the Minister of Finance, a refund of NIS 650 million, which were gained by updating the tax brackets, and transferred it to those who earn the lowest wages. This policy is already beginning to bear fruit. In 2003, approximately 12,000 Israeli workers joined the field of construction, replacing foreign workers. We intend to continue intensively pursuing this policy until every job that can be filled by an Israeli, will be.

The third subject that we have to invest in is education: our children are our future. The State of Israel is proud of its human capital that has brought us to the forefront of the hi-tech field, with the highest number of hi-tech entrepreneurs in relation to the population, including the most influential entrepreneurs in the global economy.

The investment in human capital must deepen and increase, thus bringing the State of Israel the maximum funds invested in research and development in the world and promoting Israel’s status as a global laboratory for research and development.

Our national investment in education is among the highest in the world. We invest more in every student than most countries. Nevertheless, according to international tests, the results are unsatisfactory, and the monthly salaries we pay to our young teachers is simply shameful. As in the case of improving the economy, we have no choice. We must pay more money to fewer teachers who will work longer hours.

It is our intention to present a plan for a longer school day (of course, gradually and beginning in weaker areas) in educational institutes in Israel instead of child allowances. Therefore, rather than money being paid to parents, we must, of course, consider it cannot be all the money. There are other considerations, but instead of the money going to the parents, the money will reach those who truly deserve it children. The children will gain a long school day, enrichment and supervision while doing their homework, and a hot lunch. Parents will have more time, free from worry, in order to go to work. Thus we will also be able to regulate the division of resources so that children in weaker municipalities will receive more.

The National Task Force that the Minister of Education and I have established will present its findings in the next few months. As we have not been deterred until today, we will not be deterred from this task. This issue is in our souls. In this struggle for the future of education in Israel, the teachers’ organizations will play a key role. I hereby announce: we will go all the way. I hope that we will do so together.

Members of Knesset,

We continue our policy of helping those sectors that need government encouragement in order to achieve equal opportunities. In the framework of the plan for employment assistance for single mothers, approximately 8,500 single mothers have been referred to jobs since August 2003, and a third of them have already started working.

The Knesset recently approved a plan to integrate pensioners back into the labor market. The plan includes teaching job skills and removing obstacles that affect returning to work (for example, day care). This plan will be implemented by establishing four employment centers across the country that will be charged with the general execution of the plan.

We are even working to integrate disabled people into the labor market. The Ministry of Welfare, headed by Minister Orlev, is investing huge efforts in increasing employment services meant for disabled people, thereby fulfilling their social and occupational potential to integrate. In this framework, efforts have been invested in integrating approximately 2000 disabled people into the free labor market and to jobs with reduced minimum wage salaries.

The Government established a team, headed by the Minister of Welfare, to formulate solutions for overcoming poverty and reducing it, with an emphasis on the population of children at risk. The committee’s recommendations will be presented shortly, and will enable us to make operative decisions for the necessary in-depth treatment.

We are co-operating with the business sector that is the central beneficiary of the improvement of human capital and the closing of gaps. I was happy to see that, even at this difficult time for the State of Israel, there are those in the private sector, philanthropic organizations and foundations like the Sacta-Rashi and Oren Foundations, among others demonstrated the vision and ability to activate social projects, benefiting the weaker populations in the State of Israel.

This is true in the case of the Atidim Project that was begun in the IDF by then Chief of Staff Shaul Mofaz, and today also includes industry and the public administration. I would suggest, Mr. Speaker, that members of Knesset, perhaps at some event you hold, meet the students participating in the Atidim Project. I meet them once a year to observe the developments, and it is simply amazing. The same is true with the Yaniv Project, that will begin acting in cooperation with the Government to help children at risk. The Government and the business sector must work together to create a more equal and just society.

I dedicate special attention to the Arab sector in Israel. I took it upon myself to head a ministerial committee responsible for this issue. In the framework of the committee, we are working towards implementing the plan for investing in Arab-Israelis, as well as the plan for Druze and Circassians, and the plan for the Bedouin sector. I recently visited Nazareth and Segev Shalom, where I met with the leaders of these sectors, and we discussed these plans and ways of addressing their issues.

I attribute great importance to integrating Arab business leadership in the public sector. When I saw that the integration of Arabs, Druze and Bedouins in the directorates of Government companies was taking place at a rate that I found unsatisfactory, I immediately announced that new directors would not be appointed to the directorates of Government companies until at least one Arab, Druse, Bedouin or Circassian director is appointed.

We are aware of the great distress of Arab local authorities as part of the difficulties facing local authorities in general. The Minister of Finance and I have made an appointment to meet tomorrow to see how we can help these authorities, where a push from the Government can put them on a path of efficient administration for the benefit of citizens.

Members of Knesset,

The Government I head has proved that it is not afraid of difficulties and challenges. You can note to yourselves: we will not rest and we will not be silent until we eliminate the term periphery in Israel, until we eliminate the unnecessary allowance market and establish a working, healthy society, until we allocate allowance funds only to those who cannot work, until we establish an education system that is efficient and reduced, and one in which every teacher will earn a respectable living and every student, Jewish and Arab alike, will receive an education that will enable them to face the challenges of tomorrow

. We will achieve a healthy economy. We will achieve equal opportunities. With God’s help, we will achieve prosperity and growth.

I ask the members of Knesset to vote for my announcement.

Thank you.