Israeli Economist Unveils Plan to Lower Cost of Living
Translated & summarized from Now 14 by baba
Professor Yaron Zelicha, chairman of the Reservists and Economics Party, unveiled an economic plan aimed at lowering the cost of living in Israel. The proposal includes eliminating import duties, reducing VAT and income tax, and increasing private sector involvement in infrastructure projects. Zelicha also criticized Prime Minister Netanyahu's economic policies, accusing him of favoring monopolies. The plan's funding and implementation timeline remain unclear, and it faces potential opposition from various interest groups.
The story in 6 lines · by baba
- Yaron Zelicha proposed eliminating import duties and dismantling production councils to boost competition.
- The plan includes a gradual VAT reduction to 12% and income tax cuts.
- Zelicha plans to use private sector models for major infrastructure projects like new railways and hospitals.
- He criticized Prime Minister Netanyahu, accusing him of selling the economy to monopolies.
- The economic plan's funding and implementation details are not fully specified.
- Zelicha's party will demand the Finance Ministry and universal conscription for coalition entry.
Professor Yaron Zelicha, chairman of the Reservists and Economics Party, presented his economic plan on Thursday, aiming to reduce the cost of living in Israel. If appointed Finance Minister, Zelicha proposes opening the market to imports by eliminating all customs duties and quotas, and dismantling production councils in the dairy, egg, and honey sectors. He also intends to restrict the power of large importers by prohibiting exclusive agreements and preventing dominant importers from handling competing brands. Additionally, Zelicha plans to transfer the Competition Authority to the Finance Ministry and legislate against monopolies charging excessive prices.
The tax reform component of his plan includes a gradual reduction of Value Added Tax (VAT) by one percentage point annually until it reaches 12%, and a similar annual reduction in income tax until the ceiling is 40%. He also proposes the immediate cancellation of the "locked profits" law and the excess profits tax. These measures are intended to increase disposable income but raise questions about funding the tax cuts and their impact on state revenue.
Zelicha's plan also involves expanding the use of Build-Operate-Transfer (BOT) models for infrastructure projects, such as operating an airport in Hatzor, building high-speed rail to Kiryat Shmona and Eilat, and constructing two new hospitals. He also suggests establishing a new bank through a public-private partnership and implementing the 2012 car industry reform recommendations.
On the expenditure side, Zelicha proposes canceling coalition funds, freezing budgetary pensions for current state employees, and significantly reducing benefits for those he deems "shirkers." He also aims to reduce government contract exemptions and appoint oversight firms for non-tendered contracts. However, the plan lacks a detailed budget, cost-benefit analysis for each step, or a clear timeline for implementation, leaving questions about its feasibility and the actual impact on the cost of living.
During the press conference, Zelicha strongly criticized Prime Minister Benjamin Netanyahu, accusing him of selling the economy to monopolies and extortionists. Zelicha stated that his party would demand the Finance Ministry portfolio and would only join a government committed to universal conscription, refusing to support a Netanyahu-led government without it or an Eisenkot-led government relying on Arab parties.
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