Herzog: Israel faces 'economic kassams'

Herzog is calling for an "emergency plan" to deal with housing, poverty and the cost of living.

Isaac Herzog (photo credit: MARC ISRAEL SELLEM)
Isaac Herzog
(photo credit: MARC ISRAEL SELLEM)
Labor leader Isaac Herzog on Wednesday unveiled an economic agenda that sought to reduce poverty, lower the cost of housing and help single parents.
Speaking at a Tel Aviv conference put on by the Calcalist financial newspaper, Herzog said that the economic situation Israelis face amounted to an economic attack, and poverty was a strategic threat against Israel.
“We are getting new economic Kassams [rockets] every day,” he said, citing a slew of unwelcome economic news from credit ratings agencies Fitch and Moody’s, the Taub Center for Social Policy and several reports on poverty that have been published in recent days.
Prime Minister Benjamin Netanyahu, he said, was to blame.
On housing, Herzog called for reducing the price of Israel Lands Authority tenders by 50 percent. The land itself, he said cost NIS 800,000 in Kfar Saba or Ness Ziona, and NIS 1 million closer to Tel Aviv, before a single brick was even laid. He called for building tens of thousands of public housing units and imposing price controls on rent, as MKs Tzipi Livni and Yair Lapid recommended before they were fired from their ministerial posts.
Herzog vowed to cut poverty in half in 10 years, with the help of funds accrued from supervising the price of natural gas. The topic of pricing natural gas was back in the headlines this week after Antitrust commissioner David Gilo decided to move forward with plans to label Noble Energy and Delek Group a cartel. Labor MK Avishay Braverman, who heads the Knesset Economic Affairs Committee, but is not running for reelection, called for price supervision, saying that Israel is paying almost double what it should be for its gas.
Turning to food prices, Herzog endorsed a differential value-added tax policy similar to one that Netanyahu announced earlier in the month. The prime minister had long opposed plans to exempt food products from the 18% VAT, but did an about face after elections were called, saying he planned to cut the tax on basic food items under price supervision. Herzog did not specify which foods should have lower VAT or how much they should be discounted. Though many countries have differential VAT, economists tend to prefer having a flat, acrossthe- board VAT, arguing that setting different tax levels for different products is difficult to enforce and creates bureaucracy.
Herzog said that single parents should have more support from national insurance, calling for an increase in the maximum salary that cuts the benefits off.
Children, he continued, should have a special savings fund that would ensure that at the age of 21, they had some capital to invest in education, a home or a business.
Thought he started the speech with a note that he would be focusing on the economy and not diplomatic issues involving Europe or the Palestinians, Herzog ended his speech with an admonition that Israel is dependent on international markets and that diplomatic processes are important for economic growth.
“Whoever creates a situation in which the whole world is against us is essentially telling the Israeli citizen there is no hope. We are alone. This is in opposition to my world view, and I will change it,” he said.