An unstable government is the source of high costs, Israeli opposition leader Benjamin Netanyahu argued. His plan has 2 central steps – slowing the growth in prices and lowering taxes.
The rising prices have been spurred on by unstable governance, opposition leader Benjamin Netanyahu argued in a presentation of his economic plan that was launched on social media on Wednesday morning.
“Our country is in a deep economic crisis. This isn’t fate. It is possible to exit it,” Netanyahu said at the beginning of the presentation. “Only a stable government, a stable national government, can lower prices,” he argued. He compared the 0.5% rise in prices during his tenure between 2015-2019 to the 4.5% rise in the past year. The war in Ukraine and the COVID-19 pandemic contributed to the rise, but “a global economic crisis is not an excuse for inaction,” Netanyahu claimed.
Under his leadership Israel weathered three global crises – first as Finance Minister in the dot-com crisis of 2003 and then as Prime Minister in the subprime crisis of 2009 and the COVID crisis in 2020 – and he can successfully lead the country through a fourth, Netanyahu argued.
“Our country is in a deep economic crisis. This isn’t fate. It is possible to exit it. Only a stable government, a stable national government, can lower prices.”
Benjamin Netanyahu
The three conditions for success are a stable government, personal leadership by the Prime Minister and a temporary, non-populist emergency plan.
Netanyahu’s plan included two central steps – slowing the growth in prices and lowering taxes.
In order to slow the growth in prices, Netanyahu argued that Israel needs to lower the prices of the four “inflation instigators”: electricity, gasoline and water, and municipal taxes – which he promised to freeze for a year. He also pledged to lower food prices via tax and tariff cuts.
The second step, lowering taxes, includes lowering income tax by further spreading out tax brackets and enlarging tax credit points, enlarging negative income tax and lowering corporate taxes in order to encourage growth and income.
Funding for the plan will come from an excess of government income and from improving the public sector’s efficiency, Netanyahu said.
He also promised specific treatment for housing and education. On housing, the opposition leader plans to issue government bonds that are linked to housing costs so as to lower demand, as people will no longer hastily buy real estate out of fear of the rising prices, which makes them rise even more; to shorten the time required to receive building permits; to cancel the need for permits and instead use a model of post-construction supervision; land subsidies for young couples; funding supporting infrastructure prior to, and not after, construction; and institute a “carrot and stick” mechanism for contractors, which awards those who begin construction soon after the land purchases and sanctions those who take too much time.
On education, Netanyahu promised to make education free for children aged 0-3, which will “lower family expenses by tens of thousands of shekels, grow the economy and enable both parents to go out and work,” he said.
Netanyahu’s rivals ridiculed the plan.
“When Netanyahu became Prime Minister in 2009 the cost of living here was around the OECD average, [but] when he finished, we were the second most expensive country in the world, with a 10.5% deficit and 9.2% unemployment, and now he brings an economic plan?”, Finance Minister Avigdor Liberman wrote on Twitter.
“It is worrisome to think what the results will be. We began to fix what he left, and thanks to us there is no deficit or unemployment. Continue talking, and we will continue doing,” he wrote.
“He who prevented [passing] a state budget from personal and legal considerations, put his personal wellbeing before the countries and severely damage the Israeli economy – is not worthy and cannot advance any economic solution,” Blue and White – The New Hope (BWNH) said in a statement.
“After the election, we will form a stable and broad government that will lift Israel out of the crisis – without him [Netanyahu],” BWNH added.
Yesh Atid responded, “Opposition head Netanyahu is continuing his disconnected fake news crusade in order to hide the fact that for 15 years he carelessly and recklessly neglected Israel’s economy. The Change Government headed by [Prime Minister Yair] Lapid will continue to achieve successes in the struggle to lower the high cost of living for the citizens of Israel.”
Deputy Economy Minister and candidate for Meretz leadership Yair Golan said, “No plan by Netanyahu will hide his failure in stopping the rise of prices in Israel. He, and only he, is responsible for the housing price insanity. He is the one who enabled importers and manufacturers to turn Israel into one of the most expensive countries in the world. A person caught up in hedonism and receiving gifts will never be able to understand the distress of the Israeli public.”
Labor CEO MK Ram Shefa said, “In the entire Western world the democracies understand that in times of crisis like now the government must reach into its pocket and generate government investments for the good of the citizens. Netanyahu’s proposal is exactly the opposite, where the government does away with its responsibility. We must make an effort to receive the Finance portfolio in the next government.”