This morning, Likud chairperson and former prime minister Benjamin Netanyahu presented his party’s economic platform in the election campaign for the 25th Knesset. The program was drafted by former minister Yuval Steinitz, National Economic Council head Avi Simhon, and former Ministry of Finance director general Shai Babad.
Netanyahu is the first politician to present an economic program against the background of rising prices, and promises to bring them under control and even halt them by lowering taxes and price cuts. Netanyahu says that in order to extricate Israel from the situation a “stable government” is needed, and that he will lead implementation of the economic program himself if he forms the next government.
Netanyahu said he would propose an emergency plan to deal immediately with drivers of inflation: electricity, fuel, and water prices, and that he would freeze arnona (local government rates) for a year. “Every two or three weeks, a ministerial committee headed by me will meet and monitor implementation,” he said. He also said that, as in the government he led in 201-2019, he would lower customs duties and further open up the Israeli economy to imports.
Netanyahu further said that he would take action to reduce the tax burden on Israelis by cutting Income Tax rates, giving more tax credit points to parents, and widening the tax brackets. The program also includes deepening negative income tax and reducing Companies Tax.
Greater government efficiency
Like Benny Gantz’s Blue & White party, Likud is promising free pre-school education from birth. Netanyahu claims that surplus tax collection of NIS 60 billion is expected, and that this will serve to finance his party’s program. He also claims that he will streamline government ministries, which he called “inefficient”.
The program also promises a halt to the rise in home prices, and even a decline, something that recent governments have failed in. “A stable government can act to reduce and stabilize home prices, and has done. We built 70,000 apartments in the Buyer Price program, we gave contractors incentives to build, we linked the periphery to the center of the country with roads and infrastructure, we released land in the center of the country, and we transferred IDF bases to the south.”
Outlining the means by which he planned to curb home prices, Netanyahu said that a government bond would be issued linked to home prices, with the aim of easing demand in the housing market, that the time taken to obtain a building permit would be cut, and that subsidies would continue to be offered on land prices for building homes for young couples. The program also call for budgeting of support infrastructure such as roads and schools before home construction starts, and that contractors would be rewarded for building quickly.
Netanyahu said there were three conditions for success: a stable government, personal leadership by the prime minister, and a temporary emergency plan that was not populist. “In the past year, every family in Israel has paid at least NIS 7,600 in additional expenses, a huge burden on the family. Price rises will bring more price rises. We are facing the danger of an inflationary spiral. There is a global crisis, no-one denies that, but that’s no excuse for doing nothing. A global economic crisis requires leadership that will bring Israel out of the crisis first in the world. It’s not a decree of fate,” Netanyahu said.
Netanyahu’s political rivals were quick to criticize him. “The person who prevented a state budget from being passed out of personal legal considerations, who put his personal welfare before that of the country and caused severe damage to Israel’s economy, is not worthy and not able to promote any solution in the economic sphere. After the election, we shall form a stable, broad government that will extricate Israel from the crisis – without him,” Benny Gantz and Gideon Sa’ar’s Blue & White-New Hope alliance said in a statement.
Prime Minister Yair Lapid’s Yesh Atid party said, “Opposition chairperson Netanyahu continues his disconnected fake news campaign in order to hide the fact that for fifteen years he wantonly neglected Israel’s economy. The government of change headed by Lapid will continue to post achievements in the battle to reduce the cost of living for Israel’s citizens.”
Published by Globes, Israel business news – en.globes.co.il – on August 3, 2022.
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