Will Israeli Hightech Workers Lose Their Leased Cars and Pay Taxes on Parking Spots As The Government Goes Green?

(View of parking lot below Azrielli Center in Tel Aviv)

They giveth and then taketh away: The recently Annual Report issued by the Bank of Israel, has devoted an entire chapter to the excessive use of leased company vehicles by employees, which are clogging up the country’s motorways and contributing greatly to the amounts of air pollution in and near major cities.

The report noted that even though amounts paid by employees for these vehicles increased considerably, following changes set in place by the Finance Ministry, the increased amounts have not caused any measurable reduction in the numbers of such cars on the road.

The report noted that 61% of the people using such cars drive them much more than those who drive their own cars (21%). The original idea was to enable company employees an easy way to get to and from work in situations in which public transport is not readily available; as well as allowing employees to work longer hours and not have to depend on bus or train schedules to get home after work.

While this appears to have been good logic, especially when employees of many high tech companies work as many as 12 to 14 hours a day; it was found that these employees use these cars for all types of private journeys, including weekend jaunts all over the country – at the employer’s expense.

The amounts the employee pays for using the lease car includes all fuel expenses, insurance, maintenance and repairs. As long as the employee doesn’t drive in excess of the annual mileage allotment given in the lease agreement, he or she pays the same price whether the car is driven every day, or simply sits in the parking space where the employee works or lives.

And since the amount the employee has to pay has increased, it virtually makes it conducive for them to use the car more often to “get their money’s worth” out of the deal.

Regarding leased company cars, the Ministry is recommending that cleaner, more fuel efficient cars be given to employees; such as new hybrid models which incorporate a duel power system of both electric and gasoline engines. This will help reduce the amount of pollution and save fuel consumption at the same time.

The quality of public transport is to be improved to encourage employees to use it for getting to and from work. The Ministry is also studying the idea of special taxes being levied for people entering major cities such as Tel Aviv with their car to encourage them to use public transport instead.

Parking spots that employees receive at their work may also be taxed, and workers willing to give up their parking place will be given a sum of money to do so.

Another measure being considered is to plan better public transport for new residential settlements so that the residents do not have to resort to private cars to go to work

For a country in which only 1 family in 4 owned or had use of a car as recently as the early to mid 1980’s, use of lease cars has resulted in two and even three car families being commonplace.

The present state of congestion on the country’s motorways is a sobering indication in which government traffic planning has not kept up with current realities. What’s more, people have simply become spoiled and used to the convenience of having a car available to go even two blocks to the neighborhood supermarket.

It’s time for Israel to shape up its public transportation policies if it wants to think about a sustainable future.

[image via saks08]

::Globes