Photo: Eli Elgarat
'Election sausage.' Netanyahu
Photo: Eli Elgarat
Sever Plocker

Social Bibi?

Netanyahu’s promise to ‘eliminate poverty’ within three years is not even funny

Benjamin Netanyahu, the former finance minister and current Likud leader, has presented his social-economic platform.


So what, exactly, is Netanyahu proposing? The only word I phrase I can think to describe his "platform" is "election sausage": A large intestine filled with breadcrumbs and lollies, very little meat and a lot of scribble.


Personally, I feel a great despair. Especially from Netanyahu, I expected a lesson in seriousness, responsibility and discretion, not an exercise in election economy in the worst sense of that phrase.


I hoped in vain.


Eliminating poverty – in three years?


Let's start with poverty. Netanyahu is promising to "eliminate poverty" within three years. There is no basis for this promise.


There are more than 1.5 million poor people in Israel. Even with massive social investment over the next decade, we will only be able to slash poverty by a third, at the most.


But eliminate poverty completely? By 2009? Coming from the man who saw poverty rise by 15 percent during his term finance minister, this is not even a bad joke.


And Bibi himself backed off the promise soon after making it. "Essentially, I meant that whoever wants to work will be able to find a job," he told me.


Cutting unemployment


And what about his promise to cut unemployment by five percent? To accomplish this, the Israeli economy would have to grow like the Chinese one – at about eight percent a year.


But no one expects this to happen. Not even the most optimistic financial analysts.


And how, exactly, does Netanyahu intend to go about slashing poverty? Income for the poor would have to rise at double the average national income per person for them to be able to extract themselves from poverty.


Yet Netanyahu's social plans don't address this. The entire plan looks like an inflated collection of proposals taken from judges and bills of various expert committees.


From ministry to opposition


When Bibi was finance minister, his senior officials (at the minister's instruction) rejected many of these proposals.

Now, in opposition, he's adopted them.


Netanyahu is proposing, for example, negative income tax. Finance officials have always been, and remain, opposed.


The Bank of Israel and the Prime Minister's Office both support the move.


Netanyahu proposes tax breaks for money paid to babysitters. Tax authorities strongly oppose the move.


Netanyahu proposes paying salaries to IDF soldiers and giving exaggerated bonuses to employers in exchange for hiring new workers. Officials in both the finance and labor ministries question the wisdom or effectiveness of such the proposal.


More subsidies?


In addition, proposes "free nursery schools, especially for single parents." But the state already generously subsidizes child care.


This government aid is based on income tests for parents as well as social and demographic indicators. There are 12 levels of aid available, starting with 70 percent of the total cost of nursery or child care center.


There are special benefits reserved for single parents, the unemployed, new immigrants, student families and more.


Does Netanyahu suggest subsidizing single mothers who have inherited USD 5 million or received large divorce settlements? And how, exactly, will this defeat poverty?


More proposals


Another outrageous proposal: Lowering university tuition by NIS 3,000 (USD 635) per year. This is just one of several proposals that form Netanyahu's attempt to overtake Labor Party Chairman Amir Peretz on the left. Peretz has put forth a (good) student loan proposal.


Excuse me, Bibi – are you in complete control of all your senses? You are proposing that a computer science student whose father owns a Nasdaq-listed hi-tech company should get his education paid by the Israeli tax payer? I can't believe my ears.


Anti-social, anti-economic, no benefit


There are more Bibi-promises to add to the category of "election sausage." No responsible Israeli government would ever consider lowering value added tax to 14 percent, the lowest in the Western world.


Just this week, the Bank of Israel said such a move would be anti-social, anti-economic, and would provide no benefit.


In addition, Netanyahu's proposal to lower the highest income tax bracket from 49 percent to 40 percent is irresponsible and has no chance. But at least this proposal does not contradict the world view Netanyahu put forth as finance minister.


Reforms in place


As for infrastructure reforms (electricity, aviation, real estate), Netanyahu has repeated his plans a million times.


But he has forgotten that the great majority of these reforms are already being implemented, thanks in no small part to him, when he was a serious finance minister.


This close to elections, Netanyahu has changed his skin, and more than a bit of his aggressive right-wing ideology has become a socialist pose.


In reaction to public criticism he is extending the public purse.


What's a few billion?


Raising pensions for the elderly will cost a billion shekels; subsidizing half of the medications for the elderly (according to the national insurance law) will cost NIS 600 million (USD 127 million); paying third-year soldiers will cost NIS 1.2 billion (USD 250 million).


Raising public housing and transport subsidies (both are already subsidized) run about NIS 400 million (USD 84 million), negative income tax for low wage earners will cost NIS 500 million (USD 106 million), and the gradual annulment of university tuition will be an additional NIS 200 million (USD 42 million).


In all, that's somewhere between 4.8 and 5.5 billion extra shekels per year. Per year!


And we haven't even started to consider the budgetary costs of cutting VAT, income tax, business tax…


Social cutbacks


These are massive sums. They will be impossible to fund unless the government cuts back in other areas.


Such as what? Social areas, of course. Mr. Netanyahu places great importance on budgetary savings that will come as the result of determined policy to offer tenders for the sale of government, but these predictions have yet to be proven.


At this stage, the law of exaggerated tenders is seen by the public sector as a curse, not a blessing.


All of a sudden, in the middle of winter, Benjamin Netanyahu is talking about a "full government treasury," as if this justifies unwise and unhelpful government spending, and as if this heavy public responsibility doesn't bother us.


Therefore, if Netanyahu was finance minister today he would reject most of the suggestions proposed by Bibi the opposition leader.


Sever Plocker is a regular contributor to Israel’s leading newspaper Yedioth Ahronoth


פרסום ראשון: 02.08.06, 12:41
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