Steinitz, 'Everyone must enjoy the growth'
Photo: Nir Landau
Steinitz: We'll bring more haredim, Arabs into workforce
At Jerusalem Conference, finance minister speaks of plan to increase growth cycle in Israel's economy, says in order to ensure growth closes social gaps, will act to encourage ultra-Orthodox, Arab sectors to join workforce
Finance Minister Yuval Steinitz on Tuesday opened the seventh annual Jerusalem Conference which addressed the State of Israel's position on tackling the economic crisis.
The minister said, "We believe we can stir a cycle of renewed growth and regain growth rates of 5% and over, just as we had in the years between 2004 and 2008, if we act responsibly and develop our advantages in high-tech and technology, if we simplify bureaucratic procedures and if we are accepted into the OECD."
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But the minister noted that "the second mission, which is no less important, is to ensure that the coming cycle of growth will be one that closes the gaps in the Israeli society, and not one that widens gaps. In order for everyone to enjoy the growth, we must take care of the market."
To this end, he said the number of labor immigrants must be cut back, while brining the ultra-Orthodox and Arab populations into the workforce.
"We must make sure that the next growth cycle does not come with a massive addition to the number of foreign workers," he said. "Because the foreign workers compete with the weak in our society, and not with the strong. Therefore, we have been leading a different immigration policy to cut back on the number of foreign workers – so that the entire Israeli public can participate in the next cycle of growth."
He went on to say "the next step is to focus on the two populations with the lowest participation rate in the workforce – the Arab and haredi populations – we want to help them help themselves and Israel's economy. In the matter of minimizing immigration, we have already formed a different policy, but with regards to encouraging the Arabs and the haredi Jews to increase their participation in the workforce – we are still examining our steps. I believe it will take a few months until we apply a clear policy in this matter."
Regarding Israel's tax policy, Steinitz said the government has been conducting itself in a manner contrary to that of most other countries around the world during the economic crisis. "We've been going in the opposite direction," he said, "In most of the world, they lowered taxes during the crisis, while in Israel – in the height of the crisis – the second quarter of 2009, we raised taxes.
"We raised taxes when the rest of the world was lowering them, but at the same time we prepared a seven-year plan to reduce taxes. We created an opposite motion – while the rest of the world was reducing taxes, now they are starting to increase them, but we raised taxes in order to lower them."
He continued, "When it comes to tax policies, what is important is not what you do in the height of the crisis, but what the plans for the future are. How taxes will be in Israel in a few years when there is recovery. The idea is that not only does the present influence the future, but that the future also has an impact on the present… If you transmit an optimistic, reasonable, and stable future, and if you succeed in saving now in order to have plans that will prove credible and reliable, then your plans for the future will influence the present. We gave priority to long-term parameters in order to influence the present – this was the most efficient stimulus plan."
