Economic Party Offers Right-Wing Platform with a Twist

The Economic Party, led by Yaron Zelekha, is uniquely focused on economic issues within the Israeli political landscape. Despite previous electoral attempts yielding low support percentages (0.8% and 0.3%), a recent alliance with Yoaz Hendel and the reservists' party has led some polls to predict it could surpass the electoral threshold and become a surprise contender, potentially influencing the next prime minister. Zelekha's detailed economic platform aligns with right-wing economic principles but is presented in a less dogmatic and more interventionist manner than typically seen. While viewing the market as the primary economic management mechanism, he advocates for intervention where deemed necessary and increased investment in specific sectors. Zelekha himself is the party's main asset, characterized by his experience, agenda, and self-confidence.

Zelekha, who served as Director-General of the Ministry of Finance from 2003 to 2007, gained public recognition during the 2011 social protests for his focus on housing and food prices and the connections between politicians and tycoons. He claims that after his tenure, major companies avoided hiring him due to his conflicts with powerful business figures, forcing him into entrepreneurship. He also briefly joined Partner in 2010 to aid in reducing connectivity fees, framing it as a move to break monopolies and increase competition.

The Economic Party's strength lies in Zelekha's persona, as it lacks other prominent public figures, primarily comprising individuals from the business sector like accountants, entrepreneurs, and high-tech professionals. His campaign targets this demographic, positioning himself as an opponent of tycoons and monopolies that he alleges have manipulated the public system for their gain, while supporting those who achieved wealth independently. Zelekha's rhetoric harks back to an era of public anger against monopolies and crony capitalism, contrasting with current political discourse that often targets other groups.

His platform proposes tax reforms including the abolition of the excess income tax and the undistributed profits tax, which primarily affect the upper income brackets. He also calls for eliminating tax breaks and benefits for large corporations, which he argues give them an unfair advantage over smaller competitors. Additionally, the party advocates for a gradual reduction of Value Added Tax (VAT) from 18% to 12%, arguing that the current VAT disproportionately harms lower-income strata and small businesses. Zelekha also proposes lowering the top marginal tax rate for employees and the overall maximum tax rate for companies from 50% to 40%.

To increase competition and lower prices, the Economic Party suggests preventing exclusive car importers from holding licenses for multiple brands and mandating a separation between importers and authorized garages. In the banking sector, they propose establishing a bank managed by a foreign entity, with half its equity provided by the state, to ensure fair customer pricing. The platform also includes plans to re-enact a law prohibiting monopolies from charging excessive prices and to prevent food manufacturers that are monopolies from also acting as importers. The party advocates for the removal of all tariffs and import quotas, and the dismantling of agricultural production councils, proposing direct subsidies instead. These measures, previously attempted by the last government, faced opposition from farmers and the Ministry of Agriculture, who warned of threats to food security and the local agricultural sector.

Regarding housing prices, the Economic Party's approach is indirect: promoting growth-oriented policies that would incentivize investors to shift from real estate to other sectors offering higher returns. This, Zelekha contends, would reduce demand for housing, benefiting first-time buyers. The plan requires achieving economic growth and ensuring long-term security for investors, so they do not exploit falling housing prices as a safe investment. The proposal avoids direct measures to increase supply or lower prices.

In the public sector, Zelekha's party suggests transferring projects from government companies to joint private-public management and closing unnecessary government offices. They support increasing old-age pensions and disability benefits, alongside expanding staffing in social services and mental health. Educational reforms include reducing study hours and class sizes. The party aims to increase government spending on health to 8% of GDP, believing a slightly lower expenditure than the OECD average can still yield a good healthcare system. In transportation, they propose significant investment in public transit in major cities and road infrastructure, along with transferring transportation projects from government to private management.

Zelekha previously collaborated with Zehava Galon, then-head of Meretz, in 2015 on an economic plan addressing the cost of living and monopolies. At the time, he identified as a political right-winger cooperating with a left-wing party solely on economic matters, a stance he maintains. His views on organized labor have been mixed, having spoken against labor unions in the past but also working with them on occasion. Zelekha's experience as a prominent Director-General who worked alongside Benjamin Netanyahu, coupled with his ready agenda and policy proposals, suggests a potential for significant political leverage if his party achieves electoral success.