Finance Ministry Tilted Trajtenberg Report

Budget director at the Finance Ministry Gal Hershkovitz. (FLASH90)
Budget director at the Finance Ministry Gal Hershkovitz. (FLASH90)

The Finance Ministry influenced the Trajtenberg Committee report on Israel’s socioeconomic problems to obscure the true picture of health care spending, according to proceedings from committee meetings released to the media on Monday.

The 763 pages of minutes of the Committee on Socioeconomic Change chaired by Prof. Manuel Trajtenberg last year amounted to a “whitewash,” according to Globes.

The Movement for Freedom of Information fought in the courts for weeks to obtain the minutes, and it appears now that the government did indeed have something to hide.

The report, which had little to say about the Health Ministry beyond praising it as “one of the world’s best,” apparently acted at the behest of Gal Hershkovitz, the state budget director at the treasury, who steered the committee away from reaching any damaging conclusions.

When committee members were shown data demonstrating that Israel spends less on health proportionately than other developed countries, Hershkovitz explained that this was due to the lower proportion of elderly people in in the population. Taking that into account, he argued, Israel actually spends more than other developed countries per capita.

The committee’s deliberations were held against the backdrop of a nationwide doctors’ strike. During committee discussions, when somebody suggested that the doctors would tend to disagree with him, Hershkovitz dismissed their position as politically motivated and said they were inflexible in negotiations with the Ministry.

The minutes also revealed that in discussions involving education and defense spending, health issues were consistently downplayed by Hershkovitz in comparison to them. He also refused to consider reform in health care subsidies, as proposed by Deputy Health Minister Rabbi Yaakov Litzman (UTJ) following the raising of the health tax. Only minor changes were introduced in the end.

The result was a report that essentially reflected the wishes of the Treasury and the National Insurance Institute.

No Health Ministry official was ever even called to testify before the committee. The final recommendations included only an improvement in regulation of private health insurance services and increasing their transparency.

The Trajtenberg Committee was made up serving or former senior government officials, including then-Prime Minister Office director general Eyal Gabai, National Economic Council chairman Prof. Eugene Kandel, Ministry of Finance Budget Director Gal Hershkowitz and Accountant General Michal Abadi-Boiangiu.

Prime Minister Binyamin Netanyahu established the Trajtenberg Committee in response to the social protest of the summer of 2011, but most of the committee’s recommendations on taxes, housing, competition, and the public sector have not yet been implemented. The committee’s main impact has been on taxes. It stopped the government’s tax cutting program and caused the companies tax to be raised to 25%. Its other significant success was the instituting of free education for preschoolers, Globes said.

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