Mr. Speaker, members of Knesset,

It is always interesting to sit in the plenum hall and listen to the members.  Initially, the hall is nearly empty and it slowly fills up, and then it fills up with heartfelt statements like the words of MK Ben-Eliezer, which I found very interesting.  And the worrisome words of by MK's Barakeh and Zahalka about the troubling spread of crime and organized crime in the non-Jewish sector in Arab communities.  We have already held several discussions with mayors and heads of local authorities, Minister Aharonivitz and I, along with other ministers and professionals.  We will try to examine possibilities to combine our efforts to resolve this problem, not just to eradicate crime, but to work in conjunction with Arab citizens in the economy and industry.

We are going to submit a practical plan and your support as leaders of this public in these steps will be very, very important – important for you and important for all citizens of Israel.

You rightly said that crime is spreading; it has no bounds.  I was greatly interested in what you said.  I also heard what you, MK Molla, had to say about the cry arising from the community of Ethiopian immigrants.  I know it is genuine; I know it needs to be dealt with; I think it demands to be dealt with in a manner that unites all the members of Knesset.  We will take care of this as well, and I will discuss some ways later on.

However, I would like to begin by referring to the statements made by MK Ben-Eliezer, who gave me a list of tasks and set them out beginning with the renewal of the peace process with the Palestinians, or as he said, so at least they know that we, that you, the Prime Minister, is interested.  He also mentioned the Iranian issue.  This week, something very significant happened with regard to the Iranian issue because the European Union imposed harsh sanctions on Iran, first on Iran's oil exportation, but also on its central bank. 

I think that, although Iran has yet to stop is nuclear program and we do not know if it has already had an influence, this is definitely a step in the right direction.  Yesterday I called the French president, Nicolas Sarkozy, and I congratulated him on his leadership in passing this decision – one that is not simple for Europe – and he played an important role in it.  Several hours earlier, I spoke with David Cameron, the Prime Minister of Britain, and I congratulated him as well for his important role in passing this decision.  I have spoken and will speak with other leaders, and I thank them for mobilizing to this global effort.

Last night I was at an event at the Chinese Embassy in Israel marking the 20th anniversary of diplomatic relations between Israel and China.  I congratulated China for also reducing its importation of oil from Iran, but I called on them to continue this policy until they reach a situation of independence from their reliance on Iranian oil.  This reality is possible today in cooperation with other parties.  Ten days ago, I spoke with the Foreign Minister of India about this topic as well.  We hope that other countries, such as South Korea and Japan, will act in a similar fashion.  Such a thing could surely be influential.  I do not know if it will be decisive, but it can influence.

I certainly will raise these topics in China.  Yesterday the Chinese government announced that they were inviting me to visit China.  It will be one of the main topics we discuss with the Chinese government, but certainly not the only one.  We are working in a broad front in order to increase the international pressure on Iran.  This is certainly an issue of supreme importance.  At the same time, we continue our talks with the Palestinians, and we call on them not to abandon these talks – I do not want to call them negotiations yet, but we will not abandon the talks.  They continue to take place despite the obstacles that someone, not us, is piling up.  I truly appreciate the efforts by King Abdullah, King of Jordan.

I sincerely hope that the Palestinians will understand that it is in their interest to continue on the path of talks, because eventually it is only the path of talks and negotiations that will lead to progress in settling the conflict and providing a solution to the conflict.  The solution must take into account what is occurring around us – the speed at which reality changes when the threats increase, and they are increasing.  Israel needs a very strong layer of security arrangements on the ground in any future accord, but in order to reach a future accord, we must talk.

We have a custom at every Knesset session of this kind, of the 40 signatures – and one day, there may even be 40 members in attendance.  At these discussions, I customarily detail the things we have done during the period of time between the two sessions.  At the previous session I told you about the tax benefits that took effect on January 1 – benefits that award two additional tax credit points to a working father of a child up to the age of three.  This is a benefit that is worth NIS 420 per month.  In addition, there will be an additional tax credit point for a working mother of a child up to the age of five, which is worth NIS 215 per month per child. 

You were doubtful.  You said, "Okay, these benefits are taking effect, but how many families are there like that in Israel who have young children in which the parents – the father and the mother – or at least one of the parents works and is eligible for the tax return?"  I promised you I would bring you some data, and I am keeping that promise.

There are 280,000 fathers and another 100,000 mothers who are eligible.  In other words, not just thousands, but tens of thousands, hundreds of thousands, and this is a very real benefit, but it is not the only one.  At that same session, I promised you that we would continue to implement another chapter in the Trajtenberg Report, and indeed, two weeks ago, we approved the law for free education from the age of three.  How long have they discussed this law?  We all know – 63 years.  We did not talk, we acted and I think this is big news for the public at large because this decision saves families with small children several hundred shekels per month.  We are beginning to build several thousand more public daycare centers around the country.  We cannot just rent buildings, they must be built all at once.

We added something to the decision to introduce and implement – that is the right word – the law for free education from the age of three from the upcoming school year that Professor Trajtenberg did not recommend.  He did recommend subsidizing afternoon daycare and we adopted that recommendation, but we added something that was not in the report, and we said that this benefit would only apply to children whose parents work.  A school day begins in the morning and ends at 2 p.m. – that is universal – but afternoon daycare is something that we said would only be valid for parents who work, because the intention is to encourage employment and make it easier to work.  I think this is an important addition to the report.

At the same time, we did not forget the residents of Sderot and the Gaza Envelope region, and we approved economic benefits in the amount of over NIS 200 million for them.  As was rightly pointed out earlier by MK Bar-On and others, we did not break the budget.  One of the reasons we did not break the budget while implementing the decision on free education and others, which I will specify, is because the government members bear the responsibility for supporting and realizing the order of priorities they determined.  This order of priorities requires one to decide, and indeed a 4% cut in the budgets of other ministries will certainly help, although this will not cover everything.

There was also willingness on the part of the defense establishment to make structural changes that Israeli governments discussed for years.  These changes are not easy.  Some of these reforms will not be easy for the defense establishment.  However, the combination of reforms, structural changes that we are introducing and budget cuts will allow us to remain in the budget framework. It will not only allow us to stay within it, but rather than reducing the defense budget, we will increase it.

I was at a meeting at the General Staff, and the General Staff was justifiably concerned for Israel's security, and it wanted a larger increase.  We are speaking about a yearly comparison.  It is the only comparison I can see – how much they spent in fact, how much money was spent between January 1 and January 1.  When we look at the amount of money that was actually spent, we can increase the real budget by NIS three billion.  In other words, we took care of free education and we are adding to the defense budget.  As a government, we must adapt the budget to the challenges that arise out of the changing reality.

We did these two things out of a recognition that the ministers, the members of the government – and I can even add the members of Knesset to this – that there was no choice.  We want to help resolve the social problem of the cost of raising children in Israel, but we must also look at security needs.  These are two priorities – education and security – that are obligations.  So if we put money somewhere, we have no choice but to take it from somewhere else.

[Interjection by Knesset Speaker Ruby Rivlin: Mr. Prime Minister, there were NIS 3 billion in budgetary transfers?]

I would say that it was significantly more than that.  It included the sale of a certain factory; it included the evacuation of bases at an accelerated rate, which is something that we are implementing by the way.  I suggest that you not denigrate these things.  I will soon relate something about the real test, but now when I say something, the opposition naturally taunts.  Soon I will give you an indication of an objective estimation – not mine and not yours – about our conduct in economic matters.

I would also like to add that we passed the infiltrators law.  By the way, we are constantly making progress with the fence.  Between our sessions, the train flies by, as we said when we were children – not between mountains or hills, but in the sands.  It flies by.  The fence is being built.  Soon we will talk about the train. 

The infiltrators – this is a problem we have spoken about.  We are building the fence in practice, but we also have to implement and legislate this law, because the reality was untenable.  We would catch someone who had illegally infiltrated and after two weeks, he must be released.  Then he would arrive in Tel Aviv or in Carmiel or anywhere else in Israel.  He is an illegal infiltrator and the State of Israel did not have a solution to this.  This is where the justice system comes into play.  The Ministry of Justice told us to pass this law.  We did not want it; they demanded it, we passed it despite and in the face of the criticism.

Again, I want to congratulate the coalition because we are really taking care of the things we talk about.  This stoppage allows us to take additional steps as part of the general steps to stop the infiltration of people across our borders.  I believe we will be able to gain control of illegal immigration.  It is important to note that the human flood is one of infiltrators, not refugees.  We will help the real refugees as refugees must be helped.

We are now working at an accelerated rate, and because the fence is being built, the number of infiltrators has increased, and if I am not mistaken is approximately 2,000 per month.  However, I do estimate that it will decrease drastically because it will simply be very difficult to cross the border in the future.  The first lesson I learned when I joined a special unit in the army is that any fence can be breached.  However, in order to dig under and cross a fence, tunnels must be dug.  For that, one needs a structural point of entry to the shaft and an exit point, and there isn't one.  Therefore I think that even if they had such means, all told we will be able to effectively, both physically and legally, stop it.

That is what we have done over the past three weeks, but my colleagues came to me during my speech, not heaven forbid to take my attention away from you, but rather to call my attention to several other things we have done.  Deputy Minister Litzman asked that I call your attention to the fact that in these three weeks, we returned student health services in the southern part of the country, including Ashkelon, to the purview of the Ministry of Health, services that were privatized by a previous government.  He also asked me to bring to your attention the fact that we regularized the evacuation of patients and injured people by helicopter from isolated areas in the south and the north within 24 hours.  That will be included in the health basket. 

The Deputy Minister also asked that I inform you that we cancelled contract workers in hostels for Holocaust survivors.  I joined Deputy Minister Litzman and Minister Peled on one of their visits, and we committed to doing so, and we upheld that commitment because we believe that this arrangement is not proper.

With regard to the yearly summary, something I could not do because the data was incomplete at that time, today I can summarize the economic figures, three central figures: firstly, we had a growth rate of 4.8%.  A growth rate of nearly 5% is very impressive.  I do not suggest that we rest on our laurels with regard to any of these figures.  We are going into a very difficult year and we will need to find ways to increase the GDP's rate of growth.  If we make do with the forecasts, it is not helpful – I do not deal with forecasts.  I never dealt with forecasts.  That is the reason I told my colleagues in the Ministry of Finance, when I went there, that we deal with targets. 

Our target is to try to increase growth next year beyond the forecasts which today call for around 3%.  In order to increase growth, we need a tiny sliver of a huge market, which is why I will travel to China.

Speaking of the Chinese, we are discussing with them a project to connect Asia with Europe.  Many people have said that Moses was a personage, but he was not a great navigator.  He brought us to the only place in the Middle East that does not have energy and iffy surroundings.

The Promised Land has wonderful qualities and we are very attached to it, but the location is a problematic one in a tough neighborhood.  However, today it is clear that he was not so wrong in his navigation with regard to energy in the sea.  We are currently examining the possibility of transferring that energy by pipeline from the Mediterranean Sea, from Ashkelon to Eilat and from there, since there is a great deal more than we need, inter alia to China and India in order to create a strategic interest in the State of Israel among the rising powers.

Another interest we are discussing with the Chinese is something that we will bring to the government to discuss during the next Cabinet meeting.  We are going to officially decide on laying train tracks to Eilat.  The significance of such a move is that we will be able to reach Eilat from Tel Aviv within two and a half hours or two hours and 15 minutes.  I asked that it be reduced to two hours.  Two hours from Tel Aviv to Eilat and from Eilat to Tel Aviv: this is a tremendous revolution in the State of Israel.  These tracks will have two purposes.  The second part will be to transfer containers from Asia to Europe.  We are speaking with the Chinese government and with Chinese companies about partnering with us in carrying this out.

I want to create a strategic interest in the State of Israel among the rising powers, and it is time we utilize our geo-political location.  This fact should service the State of Israel.  In did in ancient times, and there is no reason it should not work in the modern age as well.  Right now our economic growth does not include it.  This growth also led to a decrease in the unemployment rate to 5.6%, which is the lowest it has been in years. 

For comparison, the unemployment rate in the Euro Bloc is 10.1%, nearly double ours.  The unemployment rate in the United States is approximately 9%.  One more very important figure – there are many figures – is the debt/product ratio.  The debt/product ratio in 2011 was 74%, which is a reduction compared with 2010 (which was 76.4%) and it is significantly lower than the OECD average which is 97.7%.

As I said, we cannot rest on our laurels.  We must increase our exports to Asia, continue to pave roads, lay train tracks, the National Housing Committees, construction – we are currently building at a rate of 50% higher than the average of the past decade: 45,000 new apartments compared with 30,000.  By the way, six months ago, people spoke about the increase in housing prices, which was expected, but today they talk about a reduction in housing prices, to the point where some people say that they went down too fast – I wish we would have such a problem.  However, supply must increase and that is the primary thing we are working on.

We are maintaining the budget, while reordering our priorities as I said – education and security.  We are working to develop infrastructure; we want to connect Asia and Europe and the Mediterranean with Asia through new infrastructure projects.  We are doing so and there is criticism.  People say, "Right.  Who will come?  How will we know the gist of the valuation?"  There is a company, one that is not new.  It is not politically affiliated and has been around for 150, 160 years: it's called Standards and Poors, which is the leading credit rating agency in the world. 

Over the past several months it has decided to lower the credit ratings of 10 countries, including very important countries like the United States, France and others.  This company decided – and I don't know if we're the only ones, but I am not familiar with another case although I could be wrong – to increase Israel's credit rating to A+.

Now I say, criticize if you must.  Standards and
Poor is not here.  It does not belong to this disagreement.  There may be a stamp of approval for the State of Israel for the past decade, but for the past three years we have been running the economy.  Believe me, they are examining us no less than you are, and they reached this decision.  I think that Israel's increased credit rating is a source of pride and great satisfaction, but it is also a source of a great deal of money because our method of issuing bonds is cheaper.  We just issued one and a half billion at a 4.8% return – what return do you think you can get in Europe?  Someone could raise eight, nine, ten more.  Here the market speaks, and that saved us money just as when you go to get a mortgage and you have a higher credit rating, you pay less at the bank.

There are other problems.  There are many other things we have done in the meanwhile.  I have not mentioned the Dead Sea yet.  We made a decision about that.  I am telling you this because you claim that the government "hasn't done anything".  It is constantly working.  I always tell the ministers, it is not enough just to do, you also need to speak about it.  So I will take this opportunity to speak.  There has been a great deal of work and many important results.

I hear your taunts, and I usually tell you one thing – I tell you to join us, unite with us because you all know the truth.  The public knows the truth as well.  I usually don't respond.  However, you taunt me to deal with certain issues, that I have no choice, that you leave me no choice.  This reminds me of the statement by Alexander Janneaus, who said, "'Fear not the Pharisees and the non-Pharisees but the hypocrites who ape the Pharisees; because their deeds are the deeds of Zimri but they expect a reward like Phineas."

This statement by Alexander Janneaus to his wife Queen Shlomzion is always true, but it is certainly true today.  My friends in the opposition, you probably need a periodic refresher, and therefore it is good that you ask me to come here and help you with that from time to time.

Let me begin with a reminder.  I want to preface my statement by saying that I am not going to refer to all the things you say, because they are endless.  For example, the issue of relations between the secular and national religious and ultra-Orthodox publics.  I believe that we have great tasks ahead of us, and they must be resolved through dialogue.  We do not need a religious war in Israel or at all.  Our enemies, who are aiming their missiles at us, do not distinguish between who wears a yarmulke or who does not, and who wears what kind of yarmulke.  As far as they are concerned, their intention is to do the same thing to all of us.  That is why I say the things I say, not out of a desire, heaven forbid, to clash with our colleagues, but simply to shine a light on what Alexander Jannaeus told his wife.

Let us start with the head of the opposition.  I asked Rabbi Litzman to refresh my memory, and he pulled out his wallet and showed me a note.  I always ask him if he has a photocopy of the note, and he shows me the original.  This note, which is in the handwriting of Goldstein, MK Livni's assistant – that same Livni who complained about guaranteed minimum income, about the fact that we gave NIS 1.4 billion to guarantee minimum income.  On this note in Goldstein's handwriting, there is a sum.  What is that sum? 1,040.  In other words, 1.4 billion.  Exactly the same sum.

Surely MK Livni remembers her vote in favor of reestablishing the Ministry of Religious Affairs.  She voted as a member of Knesset, as a government minister.  I heard you speaking out vigorously against the Tal Law, but there was something unconvincing in your voice, and why?  Because as a government minister, you voted in favor of extending the Tal Law for five years.  Since I do not take sides in internal opposition struggles, and I do not want to nurture the other candidate – they will say that I am interfering in his race – but I heard MK Mofaz object very strenuously to the Tal Law – strenuously in the exact same manner in which he supported extending the Tal Law by five years in 2007. 

I also heard that he is very angry as the Chairman of the Foreign Affairs and Defense Committee that there are not enough passenger cars to include soldiers on the train.  I say to you, it is true there are not enough, and we are going to purchase more and more, but in the meanwhile there are buses.  However, his statement is true.

I checked – there was a Minister of Transportation, we won't mention his name, in 2006-2009 who bought passenger cars.  It is important to point this out – he bought passenger cars, enough for 8,000 passengers.  That is good. Later, that Minister of Transportation left and a new one took his place – the energetic Israel Katz – and he too purchased more passenger cars and seats.  I checked how many he bought.  Apparently the number is 24,000 – in other words, three times more.  So I have a suggestion for that same Minister of Transportation who is currently the Chairman of the Foreign Affairs and Defense Committee.  I have a suggestion for him and MK Livni and their colleagues in the opposition.  I think the right thing for you to do is simply act according to one simple rule: more humility and less hypocrisy.