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Finally lowering taxes, and of course it should be congratulated. In the last two months, I have mentioned several times the inflated excise tax on fuel, the same cash cow that finance officials insist on having a hard time parting with, as well as the need to reduce taxes in light of tax surpluses in recent months and reduce the deficit.
Apparently rising fuel prices and rising public shocks have forced Finance Minister Lieberman to take for granted: ease taxes a bit and waive (a little) the excise tax, so that there will be a reduction of half a shekel per liter in the price of fuel to the consumer. Da Aka, that it is not clear to me the temporary reduction to three months.
I guess it made stomach aches for the finance officials, because they gave up something like NIS 800 million in those three months, and yet – the pocket pain of consumers is much more important, and it does not matter at the moment how world oil prices behave. What is important is that in the level of excise tax on fuel, Israel is in second place among the OECD countries, a figure that is not particularly flattering, and even after Lieberman’s decision, we are still in a high place.
Reminder: The tax component of the price of fuel to the consumer reaches around 70%, with the rest being marketing margin (10%) and the balance the cost of gasoline (about 20%). Taxes consist of two secondary ones in the case of fuel: VAT and excise tax, which in total constitute more than 50% of the cost price to the consumer. This is an exceptional tax on every scale.
- Seder night, Sabbath and Monday: Passover entry and exit times
According to comparative data from the State Revenue Administration in the Ministry of Finance, as of the fourth quarter of 2020, the excise tax on a liter of gasoline in Israel was $ 0.92 per liter. Of the OECD countries, only in the Netherlands was the excise tax on gasoline higher than in Israel, at $ 0.93 per liter (see graph). The European average is $ 0.68 per liter, while the OECD average is $ 0.61 per liter.
And more importantly: even after the recent download, Israel is still far from the OECD averages and remains in high places, so why pamper its citizens for only three months? unclear. It creates a feeling of “Take candy and shut up, but in three months everything will be back to normal.” This is not how taxes are lowered.
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The real estate market is waiting for Finance Minister Lieberman, who has scattered several hints in the media in the past month. With almost no coercion, it is unreasonable and disproportionate and will give a reward to those who do not need it.
Against this background, we spoke with a very old factor in the real estate market, who has gone through several housing plans and knows the real estate market in depth and breadth: “Finance Minister Lieberman’s new housing plan that we were informed about a month ago,” says the same source, Cooling the housing market has the potential to teach about panic among decision-makers, which in itself is particularly bad news for potential buyers (most of them at least, except for those who are lucky enough to win lotteries at the expense of the general taxpayer public).
At the center of the plan, the media reported, in the absence of an official announcement from the Ministry of Finance, it was decided that almost all state land marketed by the Israel Land Authority to those entitled to a “reduced price” would be government subsidized, instead of 40%. 2021
“In the spirit of the coming Passover, one is asked to ask: ‘What has changed?’ What made the finance minister run and declare a new housing plan, before even the first lottery of the plan he announced less than six months ago took place? “December-January led Minister Lieberman to the conclusion that if a plan for 40% land marketing at a reduced price does not seem to cool the market, then let’s double that rate.”
“I will not enter here into a discussion of whether there is any economic justification for selling state-subsidized state land – from which the three low deciles will not benefit, who can not afford equity to purchase an apartment at a reduced price. The question is whether this is what is needed to lower apartment prices To moderate the end of the increase to that of the wage increase “?
“From an analysis of the data flowing on the real estate market, especially in light of the sharp rise in construction starts recorded in 2021 and the peak recorded in land marketing by the Israel Land Authority, it seems that the big problem in the real estate market today is high demand. At a fast pace. And what causes this? Among other things, the statements of senior government officials (and of course contractors, but they can be understood) – statements that this is exactly what will happen.
“Even the finance minister himself said at a conference after the publication of his new plan that it would be an achievement if apartment prices rose by less than 7% this year. For the real estate market, fueled by expectations, it’s like adding oil to a fire. After all, who will buy an apartment today, the most significant financial expense of a household during its lifetime, if it believes that its price will soon fall, or at least rise at a slow pace relative to another solid investment property “?
“What is needed now to cool the real estate market is no longer a land subsidy, but the continuation of hard work to increase supply, and convey the message that the government will take care to remove any stone that faces this goal. This is what will convey to the public the message that this is not a decree of heaven that apartment prices will always go up. “The current generation of young couples has not experienced firsthand the sharp real decline in prices between the mid-1990s and 2007, and it is certain that the rise in apartment prices will last forever.”
“Yes, it is also the required interest rate increase in light of the surge in inflation and inflation expectations. True, the Bank of Israel ‘stated’ in its annual report about a week ago that the low interest rate contribution to rising house prices is marginal. “The same bank that priced the occupant is the one who is to blame for the rise in apartment prices, since it is increasing demand. What can be said, ‘good’ that there is, or is not, a price-per-tenant plan, to find the culprit not in your home lot.”
Haredim, illustration (the photographers have nothing to do with the article) (Photo: Yonatan Zindel, Flash 90)3
I was and remain optimistic about the integration of the ultra-Orthodox – men and women, in the employment market. The numbers testified to this, especially in women. But this week the Ecclesiastical Forum posted some interesting data with a red light and bottom line: There is a stalemate in the integration into the employment of ultra-Orthodox men. This rate increased between 2002 and 2015 after a decrease in previous years. These trends are similar to other sectors in the population, but were at a higher intensity.
The problem: It seems that in recent years the increase in the employment rate of ultra-Orthodox men has stopped. An analysis by age shows that what occurred was not a general increase in the employment of ultra-Orthodox, but an earlier entry of young people into employment, with employment at older ages remaining similar for most of the period.
These are the numbers: the employment rate of Jewish men in Israel (main working ages: 25 to 64) is approaching 90%, while its rate among ultra-Orthodox men is a little over 50%, despite a nice increase from 2002.
Additional data that emerged from the Ecclesiastical Forum study are:
Matriculation: The gap between ultra-Orthodox and non-ultra-Orthodox in eligibility for matriculation is huge, and has even worsened over the years. Less than 3% of the ultra-Orthodox men who in 2022 were aged 22 to 44 have a matriculation certificate. External (external) maturity does not bridge the gap and even increases it, since a larger proportion of non-Haredi Jews than Haredi Jews also approach and succeed in this path.
Psychometric tests: Less than 2% of ultra-Orthodox men (born 1978 to 1990) take the psychometric test by the age of 30. The achievement of the few who take the test is significantly lower than that of non-ultra-Orthodox Jewish men – the overall score is lower, the quantitative score is lower and the English score is much lower. The verbal score of ultra-Orthodox is higher – and this is not surprising, given the emphasis in ultra-Orthodox education that deals extensively with verbal analysis and abandons almost entirely English and mathematics. These results suggest that there is no problem with the learning abilities in the ultra-Orthodox sector, and that core studies can have a significant return in this sector.
education: About 8% of ultra-Orthodox men began academic studies by the age of 35, compared with almost 50% of non-ultra-Orthodox Jewish men. While most non-Haredi Jewish men go to university, most Haredi students go to colleges. Most ultra-Orthodox students do not have a matriculation or psychometric score, and they study mainly social sciences, education, law and business and management sciences – areas that are characterized by a lower return in terms of income compared to non-ultra-Orthodox areas.
Dropout from the academy: Despite the increased subsidy designed to help the ultra-Orthodox integrate into academia, college enrollment and the choice of less demanding fields of study – the ultra-Orthodox educational background leads to a double dropout rate of their non-ultra-Orthodox counterparts. Anyone, man or woman, from any sector, religion or ethnic group will find it difficult to succeed in academic studies without proper basic education – when the few who can complete an educational deficit while in academia exist in each group, and they do not represent the average ultra-Orthodox student.
Areas of employment: The most common industry among ultra-Orthodox men is education, and the majority work in yeshivas and Torah schools. Among non-ultra-Orthodox men, the most common industry is high-tech. Despite the public echo of ultra-Orthodox employment in high-tech, an examination of the data as of 2018 indicates that only 4% of the ultra-Orthodox men employed worked in this industry.
Income by field: The different set of skills and education and experience of each group lead to different jobs and high income disparities in the same industry as well. The average ultra-Orthodox hitchhiker has the highest income out of the ultra-Orthodox employed, but he earns only 62% of the average non-ultra-Orthodox hitchhiker (about NIS 14.4 thousand, compared with about NIS 23.1 thousand). There is no industry in which the income of the ultra-Orthodox is equal to that of non-ultra-Orthodox.
The education of students is even lower than that of all the ultra-Orthodox: Including the students is an important focus in the life of the ultra-Orthodox man. The person whose most occupation is studying in the kollel is a bible student, and the ideal in modern ultra-Orthodox society in Israel is that every man should be a bible student and dedicate his time to studying Torah. About a quarter of the Jewish men who were educated in ultra-Orthodox educational institutions in middle school have never been in the kollel.
There are significant social differences between the groups: At the age of 28, 98% of the students and ex-students are married and 96% have children, and their average number of children is 2.9. In contrast, only 41% of non-students at the age of 28 are married, only 36% have children, and their average number of children is only 0.7. The rates of those eligible for matriculation, taking the psychometric test, students and degree holders, which are generally low among the ultra-Orthodox, are even lower among the ultra-Orthodox who are students and former students.
The non-optimistic conclusion: Income disparities between non-ultra-Orthodox Jews and ultra-Orthodox Jews have grown over time (total income disparity), and have also increased in the scenario of convergence in employment experience. Only in the scenario that assumes convergence in the characteristics of education, the income gap narrows slightly over time. And yet, even in this scenario the gap remains high, and in any case this analysis is relevant to when few of the ultra-Orthodox men: to holders of a matriculation certificate who have approached a psychometrician and have an academic degree.
Bottom line of the Ecclesiastical Forum: “Currently, there is no evidence of convergence in education, so it is likely that the income gap will only deepen and not narrow … It seems that rumors of unprecedented integration and ‘closing gaps’ of ultra-Orthodox men were excessive “This is a gap that is difficult to fill in older people, even when large budgets are allocated for it. In recent years, the proportion of ultra-Orthodox men employed has stopped rising, leaving a huge gap between the employment of ultra-Orthodox men and the employment of Jewish men.”
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