Bibi's poverty

My assertion in my previous post (actually not only mine but also one found in the media) that Bibi was "one of the country's finest Finance Ministers" was challenged by a comment which related to this remarkable report on the annual poverty report which was published today. Rather than just leaving a comment in response, I thought it appropriate to sit down with said poverty report and compose an informed answer on the issue.

Why "remarkable"? - because although all the negative facts that it reports are sadly, completely true, it total ignores the fact that the poverty report also notes that the economy is growing, the standard of living, the average wage and GDP per capita are all going up whilst unemployment is down and that all of these trends are continuing in the current year - nor does it mention a single other positive fact.

The report's definition of poverty, as a percentage of the average wage is in itself problematic. Were the income of every person in the economy to rise by $1,000 per month, the average wage would rise accordingly, everyone would clearly be better off, but the number of poor people would be precisely the same.

That the definition only takes into account one's income is no less problematic; a millionaire with a house in London, Paris and Bnei Brak but without an actual income would be considered to be below the poverty line, as would all of those many families whose wealthy parents purchase them a property and sub them a few thousand dollars small change a month (and who claim income support and reductions in the municipal tax based on their low income).

Here's a particularly revealing passage that caught my eye (my translation):

"The rise in the poverty gap was characteristic of all sectors of the population but stood out in particular in large families and families of work age which were not working. These are the two groups that particularly suffered from the cut in children's allowance and income support".

The discovery (I seem to recall a similar passage in last year's report) that families where no-one works are likely to be poor is immediately obvious to anyone with half a brain.

Starting with this fact that families that don't work are likely to be poor and taking into consideration that families which fit this definition are frequently those for whom children in double figures is not unusual, it is easy to see why the number of poor children is growing on a yearly basis. If the poorest sectors of the population reproduce in this manner and educate their children towards a culture where working for a living is bad, the number of poor people on Bituach Leumi's records will continue to grow year by year with more poor children added every nine months in readiness for the following year's poverty report.

Not everything here is rosy - Bibi cut every single National Insurance payment in real terms and this has most certainly affected the weakest sections of the population. Certain of those cuts such as those relating to pensions have been addressed in the 2005 budget and will only start to be felt in next years poverty report, others are designed to force those capable of going back to work to get up and do so and others are plain wrong - but presumably have the long term aim of increasing the wealth in the economy to allow for larger payments for genuinely deserving claimants.

Many items in the poverty report show precisely the good that Bibi has done for the country in the time that he held the purse strings; there is plenty to be upset about but it must be taken in context and lines have to be read between in order to get a complete picture. I stand by what I said - Bibi led the country out of a recession, cut taxes and put the economy back on the rails and headed in the right direction.

Gilly