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PM vows to cut regulation, calls regulators ‘cartel’

February 27, 2014 18:51

Netanyahu says Israel has 200 regulators and thousands of regulations; no mechanism exists for calculating the cost of regulations.

Prime Minister Netanyahu at a Likud Beytenu faction meeting, November 4, 2013.

Netanyahu looking determined 370. (photo credit:Marc Israel Sellem/The Jerusalem Post)

Prime Minister Binyamin Netanyahu vowed on Thursday to cut burdensome regulations that stand in the way of business.

“There’s an excess of regulation in Israel, and we are determined to cut down the bureaucracy and regulation,” he told the Manufacturers Association of Israel at its general assembly in Tel Aviv. “The primary barrier is the cartel of the regulators, and I intend to take care of it.”

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Israel has over 200 regulators and thousands of regulatory ordinances, none of which look beyond their own regulatory domain or coordinate with each other, he said. No mechanism exists for calculating the cost of regulations, he added.

In recent years, Israel slid down the World Bank’s rankings for ease of doing business.

In 2014, it rose four places, from 39 to 35.

Antitrust Authority Commissioner David Gilo noted that there was a trade-off between bureaucracy and uncertainty when examining regulation, but said that Israel was moving on a path toward the latter. For example, instead of filling out mountains of paperwork and getting approval for an action, the authority is moving toward a model of self-assessment, similar to that in the US, he said. Under this model, companies should use their judgment in pursuing their goals and hope that the decision is not overturned after the fact. The result means a shorter process, but more uncertainty, he explained.

Beyond regulatory reform, Netanyahu said reducing the tax burden was a priority to ensure that businesses thrive.

“We want to promise that the level of taxation in Israel will be low, or lower, so to the extent possible, we will continue to outline tax cuts,” he said.

In his speech, Netanyahu said that Israel’s economy relied on the private sector, which itself relied on manufacturing, and three things were necessary to continue their development: new markets, new products, and infrastructure.

In terms of new markets, he pointed to Latin America – where he is scheduled to visit several countries in an effort to strengthen ties – and China. In a possible reference to negotiations by China’s Bright Foods to purchase Israel’s largest dairy producer, Tnuva, the prime minister said Israel should welcome foreign investors.

Speaking about infrastructure, Netanyahu said it meant not only linking the country through good transportation, but also building a strong digital infrastructure through high-speed Internet.
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