The rising prices have been spurred by unstable governance, opposition leader Benjamin Netanyahu argued in the launching of his economic plan on social media on Wednesday morning.
“Our country is in a deep economic crisis,” Netanyahu said at the beginning of the presentation. “This is not fate. It is possible to exit it. Only a stable government, only a stable national government, can lower prices.”
He compared the 0.5% rise in prices in his tenure between 2015 and 2019 to the 4.5% rise in the past year. The war in Ukraine and corona contributed to the rise, but “a global economic crisis is not an excuse for inaction,” Netanyahu said.
Under his leadership, Israel weathered three global crises – first as finance minister in the dot-com crisis of 2003, as prime minister in the subprime crisis of 2009, and the pandemic crisis in 2020 – and he can successfully lead the country through a fourth, Netanyahu argued.
"Our country is in a deep economic crisis. This isn't fate. It is possible to exit it. Only a stable government, a stable national government, can lower prices."
Benjamin Netanyahu
The three conditions for success, he said, are a stable government, personal leadership by the prime minister, and a temporary, non-populist emergency plan.
Netanyahu’s plan included two integral steps: slowing growth in prices, and lowering taxes.
In order to slow growth in prices, Netanyahu said that Israel needs to lower the prices of the four “inflation instigators” – electricity, gasoline, water and municipal taxes – which he promised to freeze for a year. He also pledged to lower food prices via tax and tariff cuts.
The second step, lowering taxes, includes lowering income tax by further spreading out tax brackets and enlarging tax credit points, enlarging negative income tax, and lowering corporate taxes to encourage growth and income.
Netanyahu said that funding for the plan would come from an excess of government income and improvement of the public sector’s efficiency.
The opposition leader also promised specific treatment of housing and education. On the former, he plans to issue government bonds linked to housing costs to lower demand. That way, people will no longer hastily buy real estate out of fear of the rising prices, which makes them rise even more.
Netanyahu also promised to shorten the time required to receive building permits; to cancel the need for permits and instead use a model of post-construction supervision; to grant land subsidies for young couples; and fund supporting infrastructure prior to, and not after, construction. He plans to institute a “carrot and stick” mechanism for contractors, which awards those who begin construction soon after land purchases and sanctions those who take too much time.
On education, Netanyahu promised to make education free for children aged 0-3, which will “lower family expenses by tens of thousands of shekels, grow the economy and enable both parents to go out and work.”
Netanyahu's rivals ridiculed the plan.
“When Netanyahu became prime minister in 2009, the cost of living here was around the OECD average, [but] when he finished, we were the second-most expensive country in the world, with a 10.5% deficit and 9.2% unemployment, and now he brings an economic plan?” Finance Minister Avigdor Liberman wrote on Twitter. “It is worrisome to think what the results will be. We began to fix what he left, and thanks to us, there is no deficit or unemployment. Continue talking, and we will continue doing.”
Blue and White – New Hope (BWNH) said in a statement: “He who prevented [passing] a state budget from personal and legal considerations, put his personal well-being before the country’s and severely damaged the Israeli economy, is not worthy and cannot advance any economic solution. After the election, we will form a stable and broad government that will lift Israel out of the crisis – without him.”
Yesh Atid added, “Opposition head Netanyahu is continuing his disconnected fake news crusade in order to hide the fact that for 15 years, he carelessly and recklessly neglected Israel’s economy. The Change Government headed by [Prime Minister Yair] Lapid will continue to achieve successes in the struggle to lower the high cost of living for the citizens of Israel.”
Yair Golan, a candidate for Meretz leadership, said “no plan by Netanyahu will hide his failure in stopping the rise of prices in Israel. He, and only he, is responsible for the housing price insanity. He is the one who enabled importers and manufacturers to turn Israel into one of the most expensive countries in the world. A person caught up in hedonism and receiving gifts will never be able to understand the distress of the Israeli public.”
Added Labor MK Ram Shefa: “In the entire Western world, the democracies understand that in times of crisis like now, the government must reach into its pocket and generate government investments for the good of the citizens. Netanyahu’s proposal is exactly the opposite, where the government does away with its responsibility. We must make an effort to receive the Finance portfolio in the next government.”