Israel Beiteinu unveils economic plan in answer to protests

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September 1, 2011 02:49

Program calls to "nurture the population that works, pays taxes and serves in the IDF."

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Nordau tent city

Nordau tent city chilled_311. (photo credit: Ben Hartman)

Israel Beiteinu on Wednesday became the first party to present a wide-ranging economic plan in an effort to respond to the current protests without breaking the state-budget’s framework.

“It cannot be that 38 percent of the population will carry the entire market on its back,” a party spokesman said.

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He explained that the figure 38% represents the proportion of Israelis who “work, pay taxes and serve in the IDF.”

“Israel Beiteinu’s goal is to nurture this population and those who used to contribute to the market – pensioners – and give them economic security and welfare,” the spokesman said. “This 38% are the backbone of Israeli society and of the State of Israel, and we have to make sure they can live respectably and see the fruits of their labor and their contributions to the state.”

A committee headed by Prof.Manuel Trajtenberg was appointed by Prime Minister Binyamin Netanyahu to evaluate the protesters’ demands and plan a new economic policy for the government. However, Israel Beiteinu came up with its own initiative long before Trajtenberg is scheduled to present his panel’s findings.

Israel Beiteinu called on the government to “act quickly and efficiently to implement real solutions.”

“Not every problem can be solved, but we must decide on the correct order of priorities and explain clearly to the public which problems we will deal with first and the time frame for solving them,” the party said in a statement.

At the same time, Israel Beiteinu said the government “cannot destabilize the market by taking irresponsible steps such as increasing the deficit or taking other populist steps that sound good but cause great damage.”

The party provided a list of steps it said would cost the government NIS 5.7 billion to NIS 6b.

The steps include subsidizing daycare from age three months to five years for families with two working parents, unemployment payments for the formerly selfemployed, subsidizing 3,000 assisted-living units, and government guarantees on mortgages.

Israel Beiteinu also recommended tax breaks with an emphasis on those with lower incomes, and called for taxation based on family units, as opposed to individuals.

The party advocated lower prices on utilities, through differentiation of electricity prices and eliminating valueadded tax on water for homes.

In addition, Israel Beiteinu recommended steps to bolster towns in the periphery, such as job creation through building universities and hospitals outside the center of the country.

Finally, the party called to increase the proportion of those working from 38% to 49-50%, which is the average for OECD states, by encouraging “entire sectors of the population who do not participate in the workforce to find employment.”

All this can be done with a “restrained fiscal policy” and without increasing the state budget, Israel Beiteinu explained, suggesting various sources of funding.

The sources include raising corporate taxes by 1 percentage point, canceling tax breaks and exemptions for exporters, and increasing taxes on people who earn NIS 60,000 or more a month. In addition, Israel Beiteinu suggested that there no longer be a maximum National Insurance or health insurance payment, and recommended that estate tax be imposed on large inheritances.

Finally, Israel Beiteinu said that the defense budget should be cut by NIS 1.5b. out of a total NIS 55b. annual budget.

Since the housing protests began in July, Kadima has said the government must change its economic policies, but has yet to present a comprehensive plan.

In early August, Kadima’s leader Tzipi Livni and faction chairwoman Dalia Itzik proposed a bill to cancel the state budget for 2011-2012, saying it “had a twisted, wrong order of priorities, that led Israel to descend into the greatest socioeconomic rift in its history.”

“It is clear to everyone that cosmetic budgetary changes are not enough,” Livni said.

“A new budget for 2012 must be prepared that will include significant changes in goals according to new priorities.”

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