Netanyahu's economic plan: what was promised, what were the lines and what not to expect

Today, the chairman of the opposition presented the Likud's economic platform for the elections. There is no need to trust the promises regarding the reduction in the prices of electricity, gas and water. Property tax prices require economic root treatment, and lowering food prices is a well-known election promise. Free education, if given, may really cause for change

Bini Ashkenazi

03/08/2022

Wednesday, August 03, 2022, 17:12 Updated: 17:58

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In the video: Netanyahu presents a plan to solve the economic crisis (photo: Likud spokespersons)

Opposition leader Benjamin Netanyahu today (Wednesday) presented the Likud's economic plan for the 2022 elections. According to Netanyahu, there are three conditions for economic success - a stable government, his personal leadership as prime minister and a temporary, non-populist emergency plan.

Walla checked what was already promised in the plan presented today In the past, which of these promises have been fulfilled, and which are unrealistic for implementation in the near future.

Fuel prices are mainly affected by fluctuations in oil prices in the world.

Gas station (Photo: Reuven Castro)

One of the first components presented to the public today in the economic plan is the reduction of electricity, fuel and water prices.

In this context, it should be noted that electricity and fuel prices are determined according to energy prices in the world.

So while the price of electricity is determined, among other things, due to the costs of coal prices in the world and the costs of electricity production, it seems that the government really has no effect on the price except for waiving the excise tax on coal, a step that the current government took at the beginning of the year but it was not able to stop the increase in electricity prices completely.

A similar logic also applies to fuel prices, which are mainly affected by fluctuations in oil prices in the world.

The significant discount that we are currently experiencing is mainly related to the drop in oil prices, and this after the current government gave up several times the revenue from the excise tax.

Water prices are mainly affected by the costs of the various water companies, it is about transmission to consumers, desalination, and waste water treatment and more.

Water prices actually went down at the beginning of the year, but not because of any step that the government can take because it has no influence at all on the water sector, which is run in a closed manner.

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Lowering food prices - a promise that every politician likes to wave (photo: PR)

Property tax and food

Property tax prices are determined according to a fixed ceiling that the government sets, including an addition of the consumer price index.

In this context, it should be noted that only a decrease in the consumer price index that reflects the change in the price level, if the government wants to lower the property tax price, it must cause the index to drop, which requires economic root treatment.

The promise of lowering food prices and eliminating tariffs is a promise that every politician likes to wave before the elections, but in practice it is difficult to keep this promise due to structural failures and due to the fact that there are different tariffs for different food products.

The current government has signed a number of decrees that impose different tariffs such as fresh meat, fresh milk, fruits and vegetables, but in the political thicket it seems that some of them will not be canceled and in order to make this possible, coordination needs to be done between several different councils and different interests.

Free education for toddlers - a program that will really help young couples go to work.

Illustration (photo: official website, "Simply Garden")

The housing crisis

Another layer that was presented to the public today in the Likud's economic plan concerned the housing crisis.

According to Netanyahu, the Likud's plan is to issue a government bond that is linked to housing prices and to shorten the time for obtaining building permits. There is also talk of subsidizing construction land for young couples and budgeting for supporting infrastructure before construction.

Some of these plans have also been heard in the past, especially when it comes to the time of obtaining building permits.

The current government also presented similar plans a few months ago, but in order to implement the plan, several entities such as the Israel Land Authority (RMI), the Ministry of Construction and Housing, and the Treasury must be connected. Reform of the RMI was carried out by Netanyahu in the past and it was indeed shortened Significantly the times but was completely useless.

Regarding land subsidies for young couples, this is a program that has also been proposed quite a few times, but if the state waives the price of the land - it should explain in detail where the money will come from.

Indeed, today it was said that the program's funding sources will be through the use of excess taxes, and the streamlining of the public sector.

In this context, it should be said that currently there is a surplus in the state coffers due to the collection of excess taxes, but part of the plan talks about tax relief, which could contradict the result you want to achieve.

In addition, it is difficult to estimate now what the collection forecast will be for the coming years.

As far as streamlining the public sector is concerned, this is a code name for cutting the services we receive.

Netanyahu himself previously referred to the public sector versus the private sector in the metaphor of the fat and the thin.

But if you want to shorten times in line for construction features, you need a public sector that knows how to work if there are enough standards and personnel.

Regarding education, it was said that "Likud commits to bringing free education to children aged 0-3. This will reduce the cost to the family by tens of thousands of shekels. This will grow the economy and allow the spouse to go to work."

This program has also been promised in the past, and unlike the other programs that seem almost impossible - this is a program that should really help young couples and allow them to go to work.

But until today it remained only on paper.

• 2022 election

Tags

• Benjamin Netanyahu

• Likud

• economic program

• 2022 election