Parties spar on economy; Lapid slams tax increases
Party leaders from five of biggest political parties sparred over the economy during a conference hosted by Chamber of Commerce.
Yesh Atid leader Yair Lapid Photo: Efrat Sa'ar
Leaders from five of the biggest political parties sparred over the economy
Thursday during a conference at the Dan Panorama Hotel in Tel Aviv hosted by the
Chamber of Commerce.
Presenting their outlook for how best to manage
Israel’s economy, Labor’s Shelly Yacimovich, Yesh Atid’s Yair Lapid, Yisrael
Beytenu’s Avigdor Liberman, Tzipi Livni and the Likud’s Yuval Steinitz took to
the stage to make their case to the country’s business elite.
may have been full of political stars, but most of the attention was lavished
upon the middle class, small and medium businesses, lower taxes and dysfunction
in the political system.
Lapid came out swinging at the government for
the tax increases that went into effect at the start of the year, saying they
exemplified a lack of priorities.
“The Israeli middle class has turned
into [Prime Minister Binyamin] Netanyahu’s ATM,” Lapid said, slamming decisions
to boost taxes while spending recklessly on things like a financially unstable
electric utility, overpaid port workers in Ashdod, subsidies to the ultra-
Orthodox and a bloated public sector.
“How dare they sit there with 34
ministers and deputies,” he asked, “and then come to the middle class and tell
them they’re taking another NIS 1,800?” Ministers without portfolio cost the
taxpayers NIS 60 million, he said, the same amount that parents of autistic
children have requested in social aid.
That statistic, he said,
demonstrated misplaced priorities.
A distorted political process was
partly to blame, Lapid said, singling out Shas as a party that pulls aside
public money for its own constituency.
“That’s what I want to be – the
Shas of the Israeli middle class,” Lapid proclaimed.
minister Avigdor Liberman agreed that the political process was not ideal for
economic management, saying the low electoral threshold made governing too
According to polls, he said, 14 parties were due to take seats
in the upcoming Knesset.
“I’m not saying we’ll be like the United States
with two parties – with our demography and sociology we never will – but five or
six is enough.”
Yacimovich, responding to Steinitz’s frequent critiques
that her economic plan would bust the budget and drive business away with higher
corporate tax rates, vowed not to raise taxes on small- and medium- sized
“Read my lips,” she said, echoing the famous
(broken) promise of former US president George H. W. Bush. “I want to say that
in our economic program we will not raise taxes on small and medium
On the contrary, we’ll make their lives easier.”
Israel, she said, the percentage of loans directed at small businesses in
proportion to GDP came to 20 percent. In contrast, the OECD average stood at 40%
and as high as 50% for countries like France and Germany.
the very top pay an effective tax rate of 2%, 6%, 9% – you know it happens –
while small and medium businesses pay the full rate. It’s not logical and it’s
not acceptable,” she continued, adding that changing bank regulations to
redirect credit wouldn’t add a dime to the budget.
Yacimovich, Steinitz, the current finance minister, renewed his assault on her
“I don’t know what’s more imaginary – promising to spend NIS 140
billion or the fact that someone who has never run anything, with no security
experience, who has never even headed the finance committee, would be prime
minister,” he said, drawing a handful of boos from the audience.
been at the helm of the economy for the past three years, Steinitz spent the
majority of his time talking up the success of the Israeli economy.
no certainty that he would reprise his role in the next government, he seemed
more intent on sealing his legacy than offering plans for the
Livni, on the other hand, presented the business leaders with an
alternative economic priority: peace with the Palestinians.
“In my eyes,
an agreement is the most important thing for the economy, for social
disparities,” she said, blasting Netanyahu for isolating Israel internationally.
“All of Europe is looking at labels, checking to see if they say ‘made in
Israel,’ and it will say ‘made in Israel’ because, heaven forbid, the government
should differentiate the settlements.”
The nation’s budget was being
misdirected toward settlements and the ultra-Orthodox, she added.
is wasted moving people from hill to hill in places that everyone knows,
painfully, and I mean really painfully, will not be part of the future state of
Israel,” she said.
Livni also laid out a handful of moderate economic
She said she believed in the struggle against market
concentration, but not as incitement against business owners.
the need to protect social and worker’s rights, but not by imposing strict
She also said she believed in the free market,
but with government intervention in cases of market failure. She cited the five
basic things that, according to revisionist Zionist leader Ze’ev Jabotinsky,
government should provide: food, housing, clothing, health and teachers. To
those she added police and personal security.
“I don’t believe in
Netanyahu’s capitalism, with no government intervention,” she said, “but on the
other hand I am opposed to the old socialism Shelly Yacimovich is
The unabashedly vocal audience of business owners and Chamber
of Commerce members had no compunction challenging the speakers, booing and
heckling as they saw fit, often in surprising ways.
Liberman’s call for
government to keep its hands off business elicited claps from one lone audience
member, while Yacimovich’s defense of social equality drew roars of
The one person who seemed determined not to be taken in by any
of the politicians was the freshly reelected head of the Chamber of Commerce,
“The government takes what you make and distributes it, but
it doesn’t make it,” Lynn, a former Likud MK, said in opening remarks that
included praise for Israel’s dynamic economy.
While saying the economy
could improve by filling out the labor force, reducing the size of government
and strengthening the private sector, he voiced doubts that the government was
up to the task.
“The real motor of growth is the motivation of each and
every one of you to build a business, to take a risk,” he said. “The Knesset of
Israel has not succeeded in understanding this basic fact.”