Prime Minister Binyamin Netanyahu and Finance Minister Yuval Steinitz on Tuesday
reiterated their intention to restrain budget expenditure during separate
speeches to a business-sector conference in Tel Aviv.
remains “very strong” despite global challenges, Netanyahu said in a prerecorded
message to the Federation of Israeli Chambers of Commerce’s annual Economix
conference. In an effort to maintain this position, he said, the government
would maintain “budgetary discipline” while continuing to encourage the business
sector, which he called the “force that powers the Israeli
Netanyahu stressed the importance of education, saying:
“Education must assist the economy, and the economy must assist
Education without a free economy will not get very far, and a
free economy without education will not realize its full potential. Therefore,
we must integrate education and the economy in an intelligent
Steinitz, who spoke following the broadcast of Netanyahu’s
speech, warned that the global economic crisis was worsening and called it “an
economic world war.”
“Israel’s fear is different from Europe’s fear,” he
said. “If, heaven forbid, we end up in the same situation as Greece or Spain,
nobody in the world will rescue us. Therefore, we must be far more
Steinitz reiterated that Israel’s economy is in a stronger
position than that of other countries. Even China and India are experiencing a
slowdown, he said.
The government would continue to prioritize the two
goals of maintaining strong growth and low unemployment, Steinitz said, adding
that it would not allow “cheap populism” and the social-justice protest movement
to cause damage.
The conference took place as Treasury staff continue to
work on 2013 budget preparations. Media reports have suggested the budget will
include large-scale spending cuts and tax increases to compensate for a
multi-billion-shekel revenue shortfall this year, although Netanyahu has
indicated that the government will not make any drastic changes to existing
Vice Premier and Kadima chairman Shaul Mofaz weighed into
the debate during his speech, proposing that the government introduce
differential VAT on basic products.
“We cannot demand that the middle and
lower classes continue to pay a hidden tax on basic products, even though it is
easy to collect,” he said.
“I am sure that this matter will be dealt with
during the current budget discussions.”
Prof. Manuel Trajtenberg, who
headed the committee established by the government in response to last year’s
protests over socioeconomic issues, said taxes must be raised “permanently”
rather than gradually.
Israelis bear a lighter tax burden than their
counterparts in other OECD nations, he said, adding that taxes must be raised in
a controlled manner, without removing business incentives or expanding
Trajtenberg urged the government to focus its immediate
efforts on funding universal education, and the next priority must be to boost