[American in Israel]

reducing expenditure (which to all intents and purposes means cutting back on public services)

I don't know, perhaps its just being an old fart, but I have not noticed public services going up. In fact, quite the opposite. Just like our school systems, the more money they go through, the worse the ratings. The roads are in worse shape, the bridges are crumbling, the police take even longer to come, there are flash mobs and corruption is running extreme in the welfare offices...

My guess is the more money they take in, the more money THEY take.

[Vanders9]

There are some very dedicated public sector workers out there - teachers, policemen, firefighters and so on - that really do try their best, but because they are not in a competitive market their managers have little incentive to cut costs and increase efficiency.