"We're in a great crisis, but we must, and we can, save the economy, save jobs, and boost the economy. We've done it before. The economy is like a plane in a dive. We'll stop the fall, after which it will soar upward," said Prime Minister Benjamin Netanyahu at the start of today's press conference to present his economic plan for 2009-10.
Netanyahu went on, "The plan comprises brakes and accelerators. The fact that we know that there are growth engines in itself helps to stop the fall. The plan combines blocking and growth measures. In addition, the most important thing is renew growth."
Minister of Finance Yuval Steinitz outlined the plan's steps, while Netanyahu sat at the side. "The plan's objectives are to halt the effect of the crisis and to create good springboards for the future. The plan's five main points are as follows: one - expansion of credit and the encouragement of exports; two - halt the increase in unemployment and to promote jobs; three - structural reforms; four - tax policy; and five - investment in physical infrastructures and human capital," he said
Netanyahu said, "Our economic policy must take us from freefall to growth. The finance minister and I have held dozens of meetings, mostly at night, and we working together on an agreed-upon strategy.
"Another important thing - it's important to have a pilot, in fact two pilots, and a direction of action. These are critical. Today, we're outlining the principles and thereby lifting a lot of uncertainty. We're collaborating with the Histadrut and the employers, which is a new approach."
Steinitz said, "We're entering a difficult time of emergency. Not only the unemployed and businesspeople are feeling the crisis. Every household feels it. We'll take courageous measures to halt the slowdown and the increase in unemployment, and to boost growth in the near future, although this will not happen immediately, but within a year or two, so that we'll already see renewed strong growth."
Steinitz continued, "We'll emerge from this crisis stronger, with an efficient and strong economy, and with a stronger society. This requires everyone to work together. It requires all of us to join hands, and requires all sectors of the economy. We have two components that are actually one: halting the slide, and the measures that will ensure growth."
Top Ministry of Finance officials were present at the press conference, sitting in the front rows of seats in the hall, not standing on the dais.
Steinitz said, "A fifth of the country's workers are afraid for their jobs. We're embarking on a struggle against foreign workers. There are 400,000 foreign workers in Israel, 300,000 of whom are illegal. I call on all employers: give precedence to the unemployed." He warned that the battle will also include stiff penalties.
Concerning the expansion of the negative income tax, Steinitz said, "This is a bonus to anyone who enters the workforce. In the coming weeks, we'll establish a fund for enterprises in outlying areas. We'll also promote a comprehensive job training program and a retraining program for the unemployed to prepare them for new jobs when growth comes."
Netanyahu said that structural reforms would focus on land, the ports, and the electricity market. He said, "Young couples cannot afford to buy a home here. It's important to change the allocation of land. It's impossible to talk about development of outlying areas without reforming the Israel Land Administration (ILA)."
Netanyahu and Steinitz also announced decisions on the structure of tax cuts between 2009 and 2016, which focuses on the middle class. Netanyahu said, "The middle class bears the heaviest burden, and as a complementary measure, we'll promote the abolishing of exemptions and improve collection. Excellent people are working there, but it's no secret that the institution has been traumatized."
Netanyahu's tax plan calls for reducing the company tax rate to 18% by 2016 and reducing the maximum income tax rate for individuals to 39%.
Netanyahu added, "The individual tax rate will fall in 2010. We must distinguish ourselves from the world, so that everyone sees that we're the most attractive. We'll we'll attract entrepreneurs and capital because the company tax will fall."
The Bank of Israel said in response to the plan's presentation, "The Bank of Israel welcomes the intention to build an economic plan based on the outlines presented by the prime minister and foreign minister today."
The plan includes increasing credit and encouraging exports, doubling the bank guarantees plan to NIS 12 billion, the establishment of non-bank credit funds in the amount of NIS 2 billion, NIS 6 billion in aid for export industries, and a NIS 2.6 billion in additional credit to small and mid-sized businesses.
Published by Globes [online], Israel business news - www.globes-online.com - on April 23, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009