PM, Steinitz reaffirm need to restrain expenditure

Finance minister warns that the global economic “crisis” worsening and declares it “an economic world war.”

June 12, 2012 17:24
2 minute read.
Finance Minister Yuval Steinitz

Finance Minister Yuval Steinitz 370. (photo credit: Marc Israel Sellem)


Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief


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.

Israel’s economy 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 economy.”

Be the first to know - Join our Facebook page.

Netanyahu stressed the importance of education, saying: “Education must assist the economy, and the economy must assist education.

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 manner.”

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 cautious.”

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 budget policy.

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 inequality.

Trajtenberg urged the government to focus its immediate efforts on funding universal education, and the next priority must be to boost employment.

Join Jerusalem Post Premium Plus now for just $5 and upgrade your experience with an ads-free website and exclusive content. Click here>>

Related Content

Prime Minister Benjamin Netanyahu
August 31, 2014
Prime minister to Channel 1: I’ll be running again in next election

By Gil Stern Stern HOFFMAN