Summary

On April 22, 2007, the Government of Israel adopted the Socio-Economic Agenda for 2008-2010 presented by the National Economic Council.  The Agenda set two central goals: reducing poverty while encouraging growth, the key to which is increasing employment; and creating leverages for balanced, long-term economic growth, the key to which is improving education at all its levels.  As part of the Government Resolution, it was also decided to establish an inter-ministerial team to implement it, headed by the Director General of the Ministry of Finance, Mr. Yarom Ariav.  The Government determined that the committee would submit quantitative goals in the areas of poverty and employment to the Government, which will be integrated into the economic policy framework in the coming years, beginning in 2008.

In order to formulate the goals, a secondary committee was established, headed by Prof. Manuel Trajtenberg, head of the National Economic Council.  The committee struggled with the issue for three months, during which it thoroughly examined the professional and practical likelihood of alternative quantitative goals.  The members of the committee did so while cognizant of the full weight of responsibility they bore, as this was the first time the Government of Israel was being called upon to adopt quantitative goals in the areas of poverty and employment.  These goals should faithfully reflect the socio-economic policy directions of the next few years and the Government’s commitment to achieving these goals, to contributing to raising these issues on the public agenda and to encouraging the multi-year allocation of resources to this end.

The committee recommends setting the two following goals for the years 2008-2010; this time period reflects a commitment to deal with the fundamental long-term problems, as well as determination to do so in a vigorous manner in the short-term as well:

1. The employment goal: increasing the employment rate between the ages of 25-64 by 71.7% by 2010, as opposed to the current rate of 69.1%.  In other words, an average annual increase of approximately 0.9% in the employment rate between 2008 and 2010.  The significance of meeting the goal is equalizing the employment rate in Israel to the current average employment rate in OECD countries.

2. The goal to reduce poverty: income for the lowest socio-economical quintile will increase by 10% (1.1 times more) of the per capita growth rate.  Thus, the weaker sectors will enjoy a significant portion of the fruits of growth.  To achieve this goal, and in conjunction with the employment goal, the portion of income from employment out of the total income will increase from 43% to 45%.  The significance of meeting this goal is a gross monthly addendum of NIS 495, i.e., a net annual addendum of NIS 5,500 to income for the average household in the first five years.