Treasury: Israel's central bank wages shocking

Source: Haaretz Daily

Some 725 public-sector employees earned more than NIS 40,000 a month in 2001, according to the annual report on public-sector wages published by the treasury yesterday.

The treasury's wage director, Yuval Rachlevsky, has ordered the ministry's enforcement unit to investigate the legality of these salaries.

Of the 680 public-sector organizations covered by the report, the highest wage costs were found in the Bank of Israel: The average central bank employee cost the state NIS 27,726 a month in 2001, even though its average salary of NIS 20,699 a month is the second highest in the public sector. The highest average salary, NIS 21,757 a month, was paid by the Israel Oil Refineries.

"What is going on at the Bank of Israel is shocking," said Samuel Nahmani, who heads the enforcement unit. "Its workers are earning salaries that are out of all proportion."

Rachlevsky, added Nahmani, is working to reduce salaries at the bank, and Attorney General Elyakim Rubinstein is backing these efforts.

In response, the Bank of Israel said: "The wages of the bank's employees are set in accordance with both the collective agreements for the civil service and the law, for whose enforcement the wage director is responsible." Furthermore, it said, the central bank has been reducing its total wage costs by gradually reducing the number of employees.

For the first time, the 2001 report also covered the health maintenance organizations and found that these organizations are paying high salaries despite enormous deficits. The highest-paid public-sector employee in 2001 was Prof. Azai Appelbaum, the head of chest surgery at Soroka Hospital in Be'er Sheva, who earned NIS 107,759 a month. Soroka is owned by the Clalit HMO, which ended 2001 with a NIS 472 million deficit.

Bank of Israel: Our wages due to so many PhDs

The Bank of Israel has responded to the public sector salaries report published by the treasury. "The salaries of Bank of Israel employees are determined by contracts adjusted to the civil service collective agreements and under laws enforced by treasury wages director Yuval Rachlevsky," it said.

The central bank said the way to streamline the civil service and save public funds is through consistent and gradual reduction of the number of workers.

Since 1987, the number of staff at the central bank has shrunk from 1,225 to 850. This 30 percent reduction saves the taxpayer tens of millions of shekels annually, it said, and in keeping with policy, during the year covered by the report, the number of positions at Bank of Israel fell 4.7 percent. This is particularly impressive in light of the increased hiring in the civil service in general.

The bank further said that the level of wages at the bank is largely due to the nature of its operations, which require a high concentration of degree holders. More than 65 percent of Bank of Israel staff hold a Master's or PhD.