"AFTER THE WAR"
Social-Economic Implications

An outline of recommendations for social policy Jerusalem, August 2006

• The estimates for the increased expenditure due to the war are around 20 billion NIS. Making up this deficit should be the main effort of the government. It is recommended that the government use the following sources. First, a one-time progressive "war tax" should be levied. Second, budget reserves that are set aside by law should be used to help finance the war. This amounts to about 7 billion NIS. Third, the government should use 100% of the state budget for 2006. (On average, the government makes use of only 98% of the budget.) This extra 2% represents approximately 5.5 billion NIS.
• The cessation of fighting provides an opportunity for a wave of economic growth particularly in the construction industry and in military related industries. Vocational retraining programs in the periphery should be looked at closely and adjusted to local labor market needs and long-term employment solutions
• The war served to highlight socio-economic gaps. It is recommended to roll-back income maintenance levels to at least the 2002 level. The government should also strive to raise old-age allowances to 18% of the average wage (they currently stand at 16%).
• A gradual increase of minimum wage should continue to be implemented as planned by the government.
• Specific recommendations were made regarding child allowances including differential payments according to number of children per family.
• The war underscored the need for coordination between government, local authorities, voluntary agencies and for-profit agencies in order to provide appropriate services to populations in need.
• Welfare departments in the North need to be strengthened in order to meet the needs of those in distress. This may require training additional welfare workers, creating liaison positions, as well as establishing local welfare centers.
• Basic policy decisions need to be made regarding schools during wartime. Investment in appropriate shelters and facilities is necessary in all sectors and especially in the Arab sector in the North.
• Although many claims have already been settled for individuals and businesses, legal advocacy must be available to everyone. Coordination between agencies is essential to avoid unnecessary difficulties for those making claims as well as to insure efficient use of limited resources.

September 2006