On Thursday morning at the Caesarea Conference in Eilat, the minister addressed attempts to build an economy based on innovation: "All the shouting won't help the populists; we will use tax incentives as an economic tool. When I entered the role I discovered that an Intel plant, planned for construction in southern Israel, moved to Ireland. Why? Because Ireland offered them better tax incentives. The shouters were pleased but we lost valuable jobs."
- Lapid: Israel can't afford to give IDF the budget it wants
- Lapid: I never said living in Israel was easy
- Lapid: No need for Palestinian recognition of Jewish state
Lapid said at the beginning of his speech that after months of working on the economic strategy of the Finance Ministry, he could present it in two sentences. "What do we want? For Israelis to earn more and their standard of living to increase. How do we get there? By creating an economy based on innovation."
After repeating the importance of innovation to the Israeli market, he said: "If I say it enough times, it becomes a kind of song, and it will enter your head and go home with you."
The central figures presented by Lapid during his speech suggest that in the past decade the rate of growth in Israel was 26.8%, but that over that same period the average monthly wage of an Israeli citizen only grew by 2.1%.
"In other words, the people who raised the profits of this country by more than 26% earned less than 2% towards their own pocket," said Lapid. "They built the Israeli economy, they turned it into a success story, they put it in the top ranks of developed countries – and earned nothing for it. The rich got richer, the poor poorer. The 30 year olds of today are the first generation of Israelis who are worse off than their parents. And it's not just that, they also live on their parents' dime and are stuck in their parents' home. This needs to change."
Spending Money at Home
The Yesh Atid chairman, who was elected on a promise to help the middle class, focused on their struggle in his speech: "We need to invest money into the middle class. We need the middle class to earn more money because they don't spend it in San Tropez or Acapulco, they spend it in Yokneam and in Kiryat Gat and in Beersheba. The next tax breaks should not go to the rich, but to the middle class."
According to Lapid, "We need to concentrate government investments in what preoccupies the middle class – education, transportation, housing, lowering the cost of living. The poverty and the disparity should not be eliminated through governmental support and stipends, but we must overcome them by helping the poor find work so they can join the middle class.
"Closing the gap is a top priority for the country, but the culture of stipends has not ended the disparity. On the contrary, it created them and maintained them. But for all of this to happen, to actualize this, there's one little thing we need: more money. We need to grow the pie."
According to Lapid, a focus on innovation is the way to grow the pie. "Our comparative advantage is innovation. It's easy to market us as the 'Start-up Nation'. It's a campaign that writes itself – 'the people of the book become the people of the tablet'. There's only one problem, and the problem is us: the Israeli government, the Israeli bureaucracy, the Israeli public sector, the Israeli regulation that's turned into a type of bureaucratic tyranny, and the atmosphere in Israeli which is alienating people and corporations alike. These are the reasons why within six years Israel managed to fall from 14th place in the rankings of national competitiveness to 26th place."
In a reminder of previous remarks, Lapid addressed Israelis who prefer to seek their fortune abroad, saying: "These young adults would stay here if they knew their country looked at them as her primary asset, as part of the process to build a model society here. Then they wouldn't go to Berlin orLos Angeles. These young adults love their country and if they only knew that their country loved them back and didn't take them for granted but treated them as agents of change, as indispensable people, they would not leave for anywhere and we would not lose a generation."
- Receive Ynetnews updates
directly to your desktop