Ex-Finance Minister Lieberman: No Tax Hikes Needed, Focus on Cuts

Former Israeli Minister of Finance Avigdor Lieberman stated in an interview that raising taxes is unnecessary, arguing that many Israelis are already leaving the country. He cited over 270,000 Israelis departing in the last three years, many with high incomes and education, and pointed to the trend of startups being established abroad rather than in Israel. Lieberman asserted that instead of tax increases, the focus should be on eliminating benefits for draft dodgers and providing for serving soldiers. He believes that four years of political stability could significantly boost the economy.

Lieberman, who previously served as Finance Minister, highlighted his past achievements, including transforming a large deficit into a surplus of 10.6 billion shekels during his tenure, which coincided with the COVID-19 pandemic and the Russia-Ukraine war. He recalled his decision to cancel unemployment benefits, which he deemed economically sound and which preceded a period of growth. He also mentioned increasing salaries for regular soldiers by 50% and Holocaust survivor benefits by 60%.

He warned of a dire economic situation, noting that the defense budget has more than doubled from approximately 81 billion shekels in 2023 to over 180 billion shekels this year, with projections to reach 200 billion. Lieberman anticipates that Israel will need to allocate 9% of its GDP to defense annually for the next decade. He also pointed to future financial challenges, including the loss of billions of dollars annually from the EU's Horizon program and the cessation of $3.8 billion in annual US security aid by 2028.

To address these financial pressures, Lieberman called for "extreme measures," including canceling indexation and re-examining the entire budget to cut non-essential items, coalition budget allocations, and subsidies. He contrasted his approach with others who he claims are merely throwing out slogans, emphasizing his focus on facts and proven experience in managing the treasury.