So what grade does Finance Minister Moshe Kahlon get? It depends on who you ask

Moshe Kahlon turns out to be highly rated in the popularity index polls - but does that mean the public is happy with his code? Not sure

So what grade does Finance Minister Moshe Kahlon get? It depends on who you ask

(In the video: Benjamin Netanyahu and Moshe Kahlon about window prices)

What grade would you give a minister who achieved very little from a billion-dollar flag project, left a hole in the budget, and in recent months, instead of managing, left the office to two senior officials who are busy with conflicting provisions? I would think that the grade should be quite low, but this week I read that the polls read by the prime minister show that the finance minister is the most popular minister among the government ministers.

According to the press report, the Minister of Finance is praised mainly for his activities to lower the cost of living and housing prices. The fact that the cost-of-living war is credited is very interesting, because as far as I can remember, when Kahlon came into office, inflation was negative, meaning that the average price of products consumers buy was declining. Last year, however, inflation went positive, and remained there this year as well. True, inflation is still very slow, but moving inflation from minus to plus does not indicate great achievements in the field of costly living. Even when it comes to food, the area most associated with the cost of living (apart from housing), no big successes have been recorded - food prices have risen at an average rate of 2.2% over the past two years, a rate that certainly provides food manufacturers.

As for apartment prices, Kahlon has invested huge sums to lower them, mainly through a price plan for the buyer. But on the bottom line, the price per dweller did provide a large number of people with subsidized prices, but it did not increase the number of construction starts. And as long as the number of construction starts did not increase, house prices did not fall. Indeed, this year prices continue to rise, and this is despite the fact that the number of apartments sold at a cost to the buyer is on record.

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The new housing price index does not reflect

By the way, the Finance Minister's environment claims that he actually managed to lower house prices, because the new house price index is falling. It is a claim that does not match the facts for three reasons. The first reason is that new apartments account for only about one third of all apartments sold in Israel, so most of the market consists of second-hand apartments, not new ones. The second reason is that dwellings sold at a cost to the buyer are also included in the general housing price index, but where they gain weight according to their share in the housing population. Therefore, the housing price index calculates the effect of housing price per user more correctly than the new housing price index.

The third reason is that the index of new dwellings is structured so that it is very much affected by the number of dwellings in the price per dwelling sold in a particular month. Because in recent months, the percentage of dwellings in the CPA out of all new dwellings sold is on the rise, this index is declining. The problem will come when one month comes when the number of dwellings at the cost of the dwelling out of all new dwellings sold will fall. When that happens, and it will soon, the new housing price index will jump right up. That's why I'm not really excited about the new housing price index, not when it goes down, nor when it goes up. But the Minister of Finance, on the other hand, is very proud to show off when the new housing price index is falling. But what will he say when the index jumps upwards?

So if the finance minister is the minister who gets the highest scores from the public, there are probably three options. One possibility is that the public is unaware of the facts. A second option is that the public is aware of the facts and yet thinks the minister has done a good job. And the third possibility is that the public is aware of the facts, thinks these are not good, but compared to the other ministers, it nevertheless seems not bad at all.

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Dr. Avihai Snir - Netanya Academic College