PM speech gestures 370.
(photo credit: REUTERS)
Prime Minister Binyamin Netanyahu on Wednesday called for an ambitious amount of
economic growth over the course of the next decade, saying that growth was the
only way to fund Israel’s security challenges.
“We need to continue
growing at 4- 5%, at a higher level of per capita income,” he said in a message
to the Israel Democracy Institute’s Eli Hurvitz Conference on Economy and
Society in Eilat.
“The only way to fund our security needs... is through
Not through excessive taxation, not through getting the
money from someone else,” he added.
Fiscal responsibility was paramount,
Netanyahu said, and growing the economy at 4-5% would be necessary to keep
Israeli tax rates low.
Though GDP growth reached levels peaking around 6%
over the past decade, in more recent years it has hovered in the 3-4% range,
still among the highest in the Western world.
Netanyahu laid out three
areas that he said could boost Israel to higher growth.
The first was
investing in cybersecurity, an area that he said would necessarily dovetail on
the growth of the Internet, and in which Israel had a competitive edge. The
second was building transportation infrastructure, which could actually leverage
the high real estate prices in the country’s center to push growth outwards. The
last was growing new markets for Israeli exports, particularly in
Competition in all fields – whether government, business or
capital markets – was important for innovation and growth, he
Opposition leader Shelly Yacimovich blasted Netanyahu over his
insistence on keeping tax rates from rising, arguing that maintaining corporate
tax and high-income tax rates would result in more burdens on the country’s poor
and middle classes.
“Does Netanyahu think that the figure released
yesterday, that 50% of the workers in Israel earn a maximum of NIS 6,541, is the
reality of an imaginary country? The prime minister must come back down to earth
and understand that his citizens are collapsing under his policy,” she
In a prerecorded interview aired at the conference, incoming Bank
of Israel governor Karnit Flug seemed to validate both perspectives.
think the main challenge for the economy is continued growth at a satisfying
rate, while creating a situation in which the fruits of the growth will be more
widely distributed to all levels of the population and contribute to reductions
in poverty and inequality,” she said.
While it is up to society to decide
what portion of the economy government should comprise, observing the trade-off
between services and taxes, Flug said it was crucial to maintain fiscal
discipline and bring down the country’s overall debt burden.