IMC Chairman, my friend Benny Gaon,
CEO of Teva, my friend Eli Horowitz,
Distinguished Chief Scientist of the State of Israel and the Ministry of Industry, Trade and Labor, Dr. Eli Ofer,
Members of the IMC,
Distinguished Guests,

Thank you for the invitation.  I appreciate the opportunity to share with you the thoughts, plans and steps the Government of Israel plans to take in the near future.  To be honest, I had doubts, but eventually decided to discard my written, prepared speech, because I felt – as sometimes happens when you arrive with a prepared speech – that one’s eyes are directed downwards for too long and one misses out on the opportunity to see the audience, which is one of the most important and significant groups in Israeli society, especially given the topics of which we are speaking.  Were it not for the blinding lights preventing me from seeing anyone, it would be easier, but we will try to overcome this.

During Benny’s speech, he placed great hopes on the need to make changes, and on the commitment created by the expectations of the Israeli public regarding the possibility to bring about this change during this Government’s tenure, which, since the last elections, is charged with running the country.

I have no desire to argue with these expectations, or to belittle their importance.  But I feel that during the past few years, there has been a rise in the recognition and consciousness that the basis, or central criteria, for bringing about real changes to the functioning of the public system – is dependent, first and foremost, on the existence of a stable government, capable of bringing about these changes, and something we have not had in the State of Israel for many years is a stable government.

Currently, a debate has arisen regarding this question, and a number of various experts have attempted to explain to us at too great a length that the Prime Minister of Israel has many fields of authority, as does the Government.  The Government can make the decision to fight; there is nothing to stop it from doing so, and therefore why do we really need to occupy ourselves with this trivial question, or that minor one, regarding changes in the governing system.

It is true that the Prime Minister has authority, and that the Government can make decisions, but, gentlemen, let us not fool ourselves.  During the 59 years of the State of Israel’s existence, 31 governments have run the country.  My Government is the 31st in the history of the State of Israel.  In other words, the average length of tenure of a government in the State of Israel is less than two years.  Is this reasonable?  Does this indicate stability?  Does this ensure continuity?  You see, we are not just slinging concrete accusations towards any specific government, but rather I am speaking with you about a period spanning almost 60 years.

I have been part of the political system for many years.  I was first elected on December 31, 1973, and I am completing my 33rd year in elected positions in the political system, at a national level.  I ask myself when, during the past few years, has the State of Israel had a budget on December 31.  As you know, the stability of the political system, its ability to function, the stability it projects, the continuity it wishes to generate, are not measured only when tested on those rare occasions of making specific decisions, but rather in the daily test of the functioning of these systems.  When you consider what is needed by the political system, the Government, the Minister of Finance, the Prime Minister – to pass a State Budget in an acceptable manner, one can only reach the unavoidable conclusion that a change must be made in the system of government.

We stated this need during the elections and before.  Naturally, during a public debate, during public discourse, always during a certain period of time, we focus on one topic, concentrate on it, and occasionally tend not to pay attention to the other topics, and in retrospect say: “Wait.  How did you suddenly remember?”  the truth is that this topic had a central place in the platform of the Kadima Party during the elections, and we spoke of it more than once:  we must make a change in the system of government.

Personally, I do not support a presidential system of government.  I do not think that this model – in the broader and deeper context of public culture and the political tradition of the State of Israel – is the correct model.  However, it is time to place this subject of changing the system of government on the agenda and seriously discuss it.  We should try to formulate a basis from broad national consensus, not based on the dictates of one party, not based on some specific set of circumstances, but always, eventually, a set of specific data succeeds in crystallizing some basis for broader agreement, which allows for such a discussion, and this is what we intend to do.

We must act concurrently on two tracks.  We must bring about changes which will stabilize our system of government and ensure the entire system’s ability to function for a long period of time, so that the Government can serve for 4 years, as determined by law – so that there can be continuity, so that the directors general of Government ministries and senior officials in the Civil Service will not be replaced every year-and-a-half, as happens with all the instability and uncertainty transmitted in these circumstances.

This is not a trivial matter.  It is one which serves as the basis for a Government’s ability to fulfill the commitments it made, and which are the basis for its election by the public.  Parallel to the change in the system of government, we must accept a constitution for the State of Israel.  This is something which can be done only with broad consensus, not based on some random, casual, Parliamentary arrangement, rather a broad base which represents the consent of all sectors of Israeli society.  However, it is time that we move on from the stage of announcements, from the stage of promises, to the state of practical implementation.

In this Knesset – in light of the reality we face, and in light of the difficulties we must overcome – we must bring about change in both these tracks at the same time, both changing the system of government and accepting a constitution for Israel by agreement, in order to stabilize the public system of government of the State of Israel, so that we can ensure the continuity of decision-making processes and the ability to manage things over the long-term and not live from crisis to crisis, from confrontation to confrontation, which eliminates the ability of the public systems and the Government which heads them, to fulfill its commitments to the public.

This will be a central issue.  I will not go into detail about what I consider to be priorities in the framework of a different system of government or the efforts necessary to stabilize it, but I reiterate, I personally am not one of the supporters of a presidential system, and therefore have no intention of supporting it.  I believe there is no Parliamentary majority for this.

I do not think that it would be appropriate that, because of a higher threshold for election, entire sectors of the Israeli public will not be democratically represented in the Knesset; this, too, would not be wise.  Yet, it is important that we act in ways which are acceptable in the democratic world to reduce the Parliamentary division which undermines the Government’s ability to administer matters in a stable manner.

This is one of the reasons why I recently concluded that there is no choice but to expand the Government’s coalition base.  A government cannot function when, before every fateful vote, it must negotiate with the members of the various factions which comprise the Government, as to how they will vote in that same vote which may determine the fate of the Government.  This must be understood – a Government must have a stable majority, and we must determine rules which will ensure this, and establish a broad political base to secure this matter.

Part of the deterioration of our political system is a result of the fact that, at one time, a party was a binding framework.  Today, in many cases, a political party is an option.  People are elected to the Knesset in the framework of one party, and later it becomes clear that there are nearly 120 parties in the Knesset, and each person is out for himself.

I remember the days which now seem so distant, but in a person’s life, on a personal level, they seem to have flown by.  Back when I was one of the young Knesset members, and perhaps the youngest, at the beginning of my tenure, I was a member of the Likud faction, and then I cannot recall when – if at all – a Knesset member could allow himself not to vote in accordance with a party decision.  It may be that at the time, this discipline was perhaps exaggerated, but between the exaggeration of those times and the lack of any discipline whatsoever today, there must be some sort of balance, in the absence of which we must create the framework to ensure its existence.

We will not introduce a threshold of 10% which will remove the Haredi parties from the Knesset, as well as the Arab parties, since we genuinely believe in representative democracy, which must reflect all portions of the Israeli population.

We must act to stabilize the system so it will have the ability to forcefully implement all the commitments made in complete good faith, through a genuine intention to implement them, and then later the unstable reality complicates its activities.

Indeed, my Government intended to and committed to bring about changes in the priorities by which the Israeli economy functions in order to emphasize social issues.

We said so, and we are doing so.  I was very pleased that Benny mentioned all the spheres in which we promised to make changes.  I would like to point several of them out.

I say directly at the outset, there is no doubt that the reality which has arisen and been fully exposed in the last several months, demands coordination of priorities from us.  For example, to restock stores in the IDF is a matter of billions, but beyond that, nothing new has been created in the last 6 months.  I can say this with certainty – no new danger has been created which did not exist before, there is no difficulty which did not exist before.

What happened is that today we are better equipped to understand that we must balance the priorities of our national management compared with what we were unable to see.  We must make these balances, but this does not absolve the Government, not even for one moment, from the need to provide an answer to social problems.  I will say one sentence which I feel summarizes the most important lesson of the fighting on the socio-economic side.

Gentlemen, the hardships discovered during the war in the socio-economic field were discovered in a place where they already existed.  Where they did not exist they were not discovered.  The same talk about difficulties on the home front was about places in which there are difficulties all year round.  Only, we preferred not to see them or pay any attention to them, or blurred them with statistics which played up to our collective ego, but did not solve them.

Kiryat Shmona was facing difficulties before July; Safed was facing difficulties before July; Sderot was facing difficulties before the Qassams started falling.  One does not need Qassams or missiles to know this.  However, the missiles helped us understand what we would not understand before this – we are not absolved even now from the duty to face this.

In the 2007 budget, which will be brought before the Knesset for approval soon, an additional NIS 864 million was allocated for health, including the medicine basket, when compared with the 2005 budget.  This is an addition which is more than the realistic growth.  NIS 864 million.  There has never been such a dramatic increase in the health basket and medicine basket as over the past two years.

In the 2007 budget, a sum of NIS 593 million has been added to education and higher learning, again beyond the realistic growth, and to this sum additional funds will be allocated which are not part of the State Budget, but rather are part of a fundraising effort made overseas, in the amount of NIS 340 million.  That is to say, we are approaching a realistic increase of over NIS 1 billion to the education budget.

In welfare budgets, including the cancellation of the freeze on the number of allowances and government grants, there will be a realistic increase beyond the natural increase in the amount of NIS 1 billion and 342 million.  This includes single-parent families; this includes nursery school; this includes daycare; this includes children at risk; this includes all these issues to which we can no longer harden our hearts and close our eyes so that we do not see their distress.  However, we are beginning to move forward now.  Of course, a significant addition to the minimum wage is also part of the upcoming annual budget.  The only difference we will make in this matter is that the last bracket in the addendum which was approved, will be paid not in July 2007, but rather in December 2007.

In addition, NIS 575 million has been added to the 2007 budget to encourage employment.  Naturally, at a meeting of this kind, I cannot to into great detail.  I will tell you here and now that the Government’s commitment to deal with all the social problems of the State of Israel has not and will not weaken.  And if there is something that we can now say with certainty it is that it is impossible to speak of data regarding the economic situation as it is – and it is exceptional – without understanding that we are duty-bound to utilize these resources to provide an answer to these social problems.

I do not wish to have a competition.  Every government is thus committed, there is no one who carries this standard with greater enthusiasm than anyone else.  We are all, as one, committed to this matter, and already in the 2007 budget, the total of all additional funds above the real growth is NIS 3 billion 809 million for social issues.  It is true that, from the beginning, I planned that the supplement would be larger, and we needed to balance them in order to stand by our commitments tied to the security system, and this is in a budget which for the first time will have its ceiling increased by 1.7%.  In addition, there will be a one-time increase of 1.7% to condense all the special expenses derived from the new data for this year.

Since the growth rates in the economy in 2006 are as we expected in the most optimistic manner from the beginning, and not lower, as we feared they would be following the fighting, since revenue will increase and since the growth is so significant, I instructed the National Economic Council, headed by Prof. Manuel Trajtenberg, to formulate a comprehensive national plan to deal with the problems of social distress and employment.  This is not only a  problem of poverty, it is a problem of employment, a problem of children at risk, a problem of boarding schools, it is the nutrition program, it is a problem of nursery schools and daycare, a problem of complementary education.

In the first half of 2007, this plan will be brought to the Government for approval, and after we go through all the procedures –  I believe that, given the data we expect for 2007, we can allocate various resources and priorities to treat these problems on an unprecedented scale without harming the security needs of the State of Israel.

 
In addition, I would just like to point out that we are also devoting a sum of NIS 2.8 billion in the 2007 budget  – nearly NIS 4 billion if we take into account the non-budgetary funds from overseas – for the rehabilitation of Haifa and the North.  This is all on the basis of total equality between the populations which live there.  It is important to emphasize this.  This is in addition to the funds which approach 1 billion and 5 billion which are related to the physical rehabilitation, provided by property taxes, and are not part of the budget.  In other words, this is an investment approaching NIS 10 billion for the rehabilitation of these areas, when funds within this framework are extremely significant in the relative, relevant way they will be invested in the southern region, which has suffered distress and a terror war for a long time.

I believe this reflects a list of priorities which cannot be mistaken nor dismissed.  Is it enough?  I do not know.  Must we act more comprehensively with a multi-year plan?  Certainly.  This is the mission of the National Economic Council, assigned for the first time to the Prime Minister’s Office, headed by Prof. Trajtenberg, in order to influence decision-making processes in these matters and assist in creating an informed and integrative process of changing policy in these areas.

The other subject on the Government’s agenda – even if the Government expands to its new composition, and I wish to make this clear – is the diplomatic subject.  I have no wish to argue why, in my opinion, talking about negotiation with Syria is not realistic these days.  I am convinced of this.  I have very serious reasons for believing they are not realistic.

I am very concerned that some of those who propose holding these talks on the basis of reality as I am familiar with it, will only achieve one thing – they may freeze the possibility of progress in the arena which is the most important arena the State of Israel has been in, remains in and will remain in, in the future – and that is the Palestinian arena.  It is true that there are difficulties in this arena.  The difficulty lies, first and foremost, in the internal confusion within the Palestinian system.

This difficulty does not allow for the creation of one central authority which can withstand the test of principles determined by the international community.  It is not that we are insisting, it is that the international community insists.

That is why it is very difficult right now.  I know that I am repeatedly asked, and that there is a segment of the Israeli Left which continues to repeat the same slogans of old without any connection to what has happened in the meanwhile.  They are constantly attacking me, “Why don’t you meet with Abu Mazen?”  I am willing to go directly from here to a meeting with Abu Mazen.  However, what can one do when he… it is difficult for him.  I spoke with him on the phone yesterday.  By the way, so that there will be no misunderstandings – there are ties, there is contact.  Yesterday, I called him to wish him, and the entire Muslim Palestinian community, a happy holiday as is appropriate, as we really do wish them well.  There is continual contact between my most important and closest advisers and his most important and closest advisers.  And each meeting ends with the question of whether or not a date can be determined for a meeting, and the Palestinian side hesitates.

I hope it will take place soon.  However, I admit that there are difficulties there.  I can promise you one thing, gentlemen – no matter what, we will create a process which will bring about the opening of negotiations with a Palestinian official with authority and with whom we can negotiate.

This matter will not change, no matter what the Government’s composition.  Even if Israel Beiteinu joins this Government, our commitment to conduct a political process with the Palestinians remains valid and strong.  Nothing in this Government’s Guidelines will change.  And I pray with all my heart that the leadership of the Labor Party will be responsible and show responsibility by remaining a central partner, in order to ensure the implementation of this policy, which is so vital to the State of Israel.

Something is occurring in the Arab world.  In the Arab world, there is a radical stream which does not recognize the existence of the State of Israel, does not recognize our right to exist, and which will act and does act against us in ways which raise serious problems.

However, there is another bloc of moderate, reasonable and balanced states, which abhor the political reality of the Middle East, the threat inherent in the instability caused by the radical factors which may affect them as well, and their attitude towards the State of Israel is not as it was in the past.

At the head of these countries are leaders who are potential partners to formulating joint regional policies with the State of Israel, led by President Mubarak, King Abdullah II of Jordan, King Abdullah of Saudi Arabia, and other leaders.

We must be attentive to their voices, and act to create joint platforms with them, which could also assist them in overcoming Palestinian issues.  I promise you that, in the coming years, my Government will make a tremendous effort to change this opportunity into a process which has a genuine chance of bringing about change.

I do not want to label anything, whether we call it realignment or we call it this kind of negotiation or another.  The label does not determine the essence, the need to reach agreement, the need to create change, and the knowledge that we cannot avoid confronting the Palestinian problem looming before us, threatening our unity, our tranquility and our quality of life, and we do not want our next generation to pay the price of a lack of courage to face today’s problems, so we will face them.

Finally, of course, is the Iran issue.  I wish to say two things: one on a level of morals and principles and one on the practical level.

Gentlemen, since the Second World War, since the Holocaust, there has not been a leader of a country who is a member of the United Nations, who rose and openly announced that he is calling for the destruction of a country which is a member of the United Nations.

I am purposely using these terms in the most sterile way; however this is what the President of Iran, Ahmedinejad, is doing.  This is without even taking into account the question of how advanced Iran is in the field of nuclear capabilities, how far along they are in building a launch platform with the ability to reach Israel, the Middle East or various areas in Europe, Asia or North America.

All this is irrelevant.  There cannot be a situation in which the leader of a small but mighty country (and Persia is mighty, with over 70 million residents) which is a member of the UN will continue to be received around the world as a legitimate leader, while he stands up and says that a country which is also a member of the UN should be erased from the map.

Such a thing cannot happen.  And in my opinion, we – each and every one of us, anyone with a conscience and morals – have a moral duty; and we will turn to these people and demand it from them, and we will not let them rest because today we will not repeat the mistakes of 60 years ago, mistakes of distractions, frivolity, of ignoring that which was heard when it was possible to respond.  And we will say everywhere, to everyone, that these things cannot be ignored.

The responsible, moral, civilized, scrupulous world, or that which pretends to be, cannot continue living with a reality in which the leader of a country says, “We must wipe off the map a country which is part of the family of nations, like Israel” unless people once again believe that when others speak of the State of Israel – the Jewish nation – there can be different criteria.

Of course we need to prepare for the struggle which is meant to prevent their acquiring capabilities as well.  This struggle is not only Israel’s; it is the struggle of all civilized countries.

I must state that, without specifying all kinds of tactical and diplomatic aspects which are unimportant – bottom line – what the Russian president says is that Russia will make every effort to prevent Iran from acquiring nuclear weapons, because he is party to the feeling and concern that nuclear weapons in the hands of the Iranians is a danger to the world’s existence.

So, I am not saying that the responsibility or ability to tilt the balance is in the hands of one country.  It is more than that.  We must act with all our strength and all our powers – political, international, diplomatic and moral – in order to mobilize all the countries so that they take action, and make every effort, to prevent Iran from attaining non-conventional weapons.

How do we do this?  You will understand that even at an important conference such as this one, we cannot go into great detail.  However, we are occupied with this, and will continue to be occupied with this day and night.

Gentlemen, these are central issues which my Government will continue to deal with in the near future.  In the end, our test – the test of our abilities – will be decisively based on the ability to create frameworks which will stabilize the political system and a broad base of Parliamentary support which will aid the Government in its actions.

We will be busy with changing the system of government and ratifying a constitution – with both these matters – and I emphasize that they both are equally important, because the constitution creates the framework which ensures that the changes to the system of government will not undermine the moral, democratic basis on which the State of Israel rests; and at the same time, we will act to widen the coalition of our Parliamentary base in order to allow us to implement these changes in the near future.

Thank you very much.