Critical failures in reforms, food security, real estate data systems, state comptroller warns

According to Englman, “Opening up the market to competition is significant to fighting the rising cost of living. The reforms initiated by the government were a step in the right direction, but were also lacking.”

The report reviewed the 2022 “What’s Good for Europe is Good for Israel” reform, spearheaded by the Economy and Industry Ministry under MK Nir Barkat (Likud). This reform aimed to reduce bureaucratic barriers, align Israeli product standards with international norms (such as those of the EU and OECD), and increase market competition.

Previously, importers were required to meet unique Israeli standards verified only by the Standards Institution of Israel (SII) in a slow and costly process.

The reform allowed importers to declare conformity to standards, instead of undergoing complete Israeli lab tests upon arrival. Regulators, including the Commissioner of Standardization unit at the Economy and Industry Ministry, were given broader powers for supervision and enforcement.

However, the reform was introduced gradually and did not apply uniformly to all products. Some unique standards and exceptions remained, while enforcement lagged. Englman concluded that, rather than solely streamlining imports, the reform also “led to confusion and did not maximize savings potential.”

A follow-up initiative launched in 2024 – the “No Stopping at the Port” reform – sought to further ease import bottlenecks by allowing goods to be cleared through customs upon arrival, with compliance checks conducted afterward. The goal was to reduce costs, speed up imports, and enhance competition.

However, implementation faltered. The comptroller found that the Economy and Industry Ministry failed to send products for quality checks for 60 days due to an expired contract with testing laboratories.

Moreover, the shift toward an automated import system removed importers from the process altogether, transferring oversight responsibilities to government bodies that were not adequately prepared.

The state comptroller urged Barkat and Health Minister Haim Katz (Likud) to close these gaps and strengthen regulatory enforcement, recommending that the reform be expanded.

Englman also warned that Israel’s emergency food supply system remains dangerously unregulated and fragmented across multiple ministries, with no single body ensuring national food security.

“The issue of emergency food supply in Israel is not regulated – there is no governmental framework overseeing it to ensure efficiency,” he said.

Unlike countries such as Japan, Singapore, Switzerland, and the UK – all of whom maintain centralized and regulated emergency food systems – Israel’s apparatus is divided primarily between the Economy and Industry and Agriculture Ministries, with little coordination.

The audit found that agricultural policy has weakened the sector over the past decade, undermining national food security. Essential reserves such as wheat and fodder were found to be, at times, improperly stored, in poor condition, and even contaminated with insects and pigeon droppings.

Additionally, the Agriculture and Raw Food Security Ministry lacked data on the extent of the damage to stored wheat, while fodder reserves were missing key ingredients.

Englman recommended that the ministry coordinate with the National Security Council, the National Emergency Management Authority (NEMA) under the Defense Ministry, the Economy and Industry Ministry, the Health Ministry, the Finance Ministry, and Home Front Command to develop a coherent emergency food supply framework.

In the audit of Israel’s 2024 financial statements, Englman issued a qualification over 18.5 billion shekels in outstanding real estate tax debts. The comptroller found that the Tax Authority’s information systems fail to meet essential accounting standards, leaving the state without reliable data on the breakdown of debts across different tax types or their collectibility.

Discrepancies amounting to several billion shekels were found between the figures in the government’s official financial statements and those reported by the Real Estate Taxation Division. The report concluded that these weaknesses raise serious doubts about the accuracy of the state’s fiscal reporting.

The comptroller also warned that the ongoing housing crisis is being managed based on incomplete and inconsistent data systems.

According to the report, more than 900,000 apartments –  about half of all properties listed in the Tabu (Land Registry) – are absent from the Tax Authority’s Real Estate Information Database. Even within the database, hundreds of thousands of entries contain incorrect details.

These inaccuracies directly affect the Central Bureau of Statistics’ Housing Price Index, which relies on this data but fails to reflect real-time market factors such as developer discounts, financing campaigns, or protected rooms in older buildings – all of which distort price trends.

Compounding the issue, the government operates two separate real estate databases, the Tax Authority’s system and the Survey of Israel’s real estate site, which frequently display conflicting information about the same properties. The report warned that these risks could mislead homebuyers, investors, and policymakers alike.

Moreover, these data failures have direct social impacts. Thousands of low-income citizens were, for instance, wrongly denied the “work grant,” a negative income tax benefit linked to property ownership, due to errors in property records. In 2022, nearly 84% of appeals on these grounds were found to be justified.

Englman called on the Prime Minister’s Office to establish a comprehensive national property information infrastructure that integrates data from the Tabu, the Tax Authority, the Central Bureau of Statistics, and the Survey of Israel. This can help ensure that housing, taxation, and welfare policies rely on accurate and unified data.

Overall, the report paints a picture of systemic administrative failures and weak inter-ministerial coordination. Englman’s message was that Israel’s economic governance must be built on data accuracy, accountability, and cooperation to meet the challenges of rising cost of living conditions and long-term national resilience.