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The past budget: many flaws, important victory - Walla! Of money

2021-11-05T08:37:37.978Z


The mobilization of senior members of the economy to assist Lieberman in transferring the budget testified to his vitality. The approved budget includes quite a few vital reforms that are supposed to have a positive impact on the pocket of us all


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Past budget: Many flaws, important victory

The mobilization of senior members of the economy to assist Lieberman in transferring the budget testified to his vitality.

The approved budget includes quite a few vital reforms that are supposed to have a positive impact on the pocket of us all, but also some problematic items.

On the good, the bad - and especially on the sense of relief in the new budget

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  • Avigdor Lieberman

  • Benjamin Netanyahu

  • budget

Sonia Gorodisky

Friday, 05 November 2021, 09:46 Updated: 10:30

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In the last four months, Lieberman has succeeded in doing what Netanyahu has not wanted to do in the past two years: the state budget for the current year and next year was approved by the Knesset in the second and third readings. There are no more deadlines or exit points for elections, which have become a new norm in Netanyahu's governments.



The deadline for passing the budget for next year is March 2022, but it has already been approved, and it is important to add: as it should be in a reformed country.



Transferring the budget after three years of paralysis is a very important event. Apart from political stability, the budget contains a large number of vital reforms for the economy.



It seems that it is not for nothing that almost every economic factor in Israel sided with the Minister of Finance: from the Governor of the Bank of Israel, through employers to the Histadrut - the economic paralysis, at the state level (at the private business level,



Government ministries will now receive money for expenses according to their needs, without the need for exceptional committees whenever a contract needs to be renewed.

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The big winner of the Knesset votes.

Not a perfect budget, but much better than having to convene an exceptions committee whenever a government ministry contract needs to be renewed (Photo: Knesset Spokeswoman Noam Moskowitz)

Important reforms that preceded it include

raising the retirement age for women

, something the Netanyahu government did not have the courage to promote (although it should be noted that raising the retirement age for both men and women may be inevitable in the near future due to the widening gap between the current retirement age and longer life expectancy).



The Metro Act

, which may remove the country from the heaviest transport crisis among OECD countries. This is after years of neglect and focusing on solutions that encourage the use of private vehicles, such as interchanges and bridges, which in retrospect extended the time of standing in traffic jams and spent tens of billions of shekels a year.



The import reform

, which intends to reduce the cost of living and

the kosher reform,

which will also reduce costs - something that had no political feasibility in the Netanyahu governments.

Traffic jams on Ayalon lanes.

After years of investing in infrastructure that encouraged the use of private cars, the end of the shop, billions are being invested in a long-term solution (Photo: Reuven Castro)

Part of Netanyahu's criticism is justified

In his speech on the night of approving the budget, one major criticism of opposition leader Benjamin Netanyahu on budget, addressed to raise taxes.



There is some justice in the words of Netanyahu, however, not everything right Leader of the Opposition when serving the future taxes imposed by the government - for example Contrary to what Netanyahu said, even those who live in Tel Aviv and leave the city during rush hour will have to pay a congestion fee, but in a reduced amount (half the amount of the fee).



Besides, Netanyahu is right: the taxes introduced in various sections (congestion charge, raising parking rates in blue and white, tax on disposable dishes, tax on sugary drinks, etc.), even if they are all justified and make sense, then their timing is bad and comes at the same time To the wave of price increases in the economy.



Beyond that, the imposition of taxes, even if indirectly, in the current period, may give legitimacy to suppliers and retailers to raise some of the prices even without justification.



What could have been done differently?

Even those who think that imposing a tax on disposable utensils and sugary drinks is justified, will admit that it was appropriate, in parallel with the congestion tax aimed at reducing the use of private vehicles, to think about lowering the price of public transport, or at the same time raising taxes on plastic utensils and soft drinks. VAT - something that would have been especially helpful for the weaker sections.

Fruits and Vegetables: Despite Promises, the country's strongest lobby has outpaced consumer interest (Photo: ShutterStock)

The big miss: neglecting agricultural reform

One of the big shortcomings of the Arrangements Act is the outlawing of agricultural reform. Although we have been promised that the reform will be promoted after the budget is approved, the question is whether the political situation will allow it.



The main goal of the reform, which was to allow the import of fruits, vegetables and eggs, came out of the Arrangements Law due to political impossibility, because coalition MKs from the coalition also joined one of the most powerful pressure groups in the country, and strongly opposed it. Therefore, in the meantime we will continue to pay dearly.



Another miss is the congestion tax, on the one hand, it was hard to believe it would remain in the Arrangements Act. On the other hand, the fact that it will only apply in 2025, when the government is likely to be replaced, puts it in danger of being abolished.



The import reform, which is admittedly very important for lowering the cost of living, will also make it easier for importers first and foremost. Will any reduction in costs also be passed on to the consumer? One can only hope so, but the concern is that just as the exchange rate differences between the shekel and the dollar have not translated into discounts on imported product prices, so much of the profit as a result of simplifying import processes will remain with importers.



Moreover, the reform is of course one of the most relevant in light of the high cost of living in Israel, but a long list of products has been excluded from it, in fact it includes only a few percent of all cosmetics imported to Israel. Beyond that, the food-related part only went into effect in January 2023, with an option to extend it for another three months.



And yet, despite all its flaws.

The bottom line of the budget is in line.

"The country is back to normal," Lieberman said - and he was right.

It is true that money is counted down the stairs, and the real test will be in the implementation of the reforms, but there will be no doubt: after years in which the state budget was hostage in one man's war for survival, sanity has returned to the economic system.



In other circumstances we would say "this is something too".

In the strange circumstances of the Israeli economy, that's a lot.

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Source: walla

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