Treasury Stresses New Taxes Needed to Pay Expected Rise in Salaries for Government Doctors
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Treasury Stresses New Taxes Needed to Pay Expected Rise in Salaries for Government Doctors

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The Treasury said today that new taxes were unavoidable to pay for the expected increase in the salaries of government-employed physicians who ended their four month-old strike yesterday after the government agreed to binding arbitration.

Although the panel of arbitrators is yet to be selected. Treasury sources and others were speaking today of a 60 percent raise for the doctors, far in excess of the prevailing 22 percent average national wage hike ceiling agreed to some time ago by the government and Histadrut. The Treasury sources estimated that this will cost the country some 12 billion Shekels (about $260 million) which is three times the amount allowed for in the national budget. The problem now is how to raise the additional money.

One suggestion floated today was a tax on every visit to a doctor or stay at a hospital on top of the monthly health insurance premiums paid to the various sick funds. Naftali Ben Moshe, a member of the executive of Histadrut which operates Kupat Holim, the largest sick fund, objected strongly.


Moshe Mandelbaum, Governor of the Bank of Israel, also opposes a levy on medical care. He said it would add to the tax burden carried by citizens which is already too high. Labor Party MK Gad Yacobi, chairman of the Knesset Finance Committee, said today that the budget shortfall could be more than covered if the government slowed down its settlement drive on the West Bank, instituted daylight saving time in the summer months and allowed El Al, the national airline, to resume Sabbath flights. The coalition and especially its religious constituents objected vehemently to such measures.

Finance Minister Yoram Aridor reportedly is determined to find outside sources to pay for the wage hikes. Aridor had threatened to resign if the government agreed to binding arbitration which he considered a surrender to the strikers. He has been silent on that since the Cabinet’s decision last Sunday and is said to be waiting to see what the arbitration panel will decide. The Treasury is deeply concerned that if the doctors receive a substantial increase, other government-employed professionals will demand equal raises. The engineers union has already announced that it will do just that.

Meanwhile hospitals all over the country are trying to return to normal as quickly as possible as a backlog of patients streamed through their doors. Hospital administrators say the process will take 2-3 days. The hospitals have been functioning with less than a third of their medical staffs since the strike began over four months ago. Many of them shut down completely last weekend because of the doctors’ hunger strike which made it impossible for them to perform their duties.

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