Israel’s new finance minister up towards ultra-Orthodox

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As chair of the Yisrael Beitenu get together, one among Avigdor Liberman’s calls for for becoming a member of the brand new coalition was that it doesn’t embody the ultra-Orthodox events. Liberman was largely answerable for Prime Minister Benjamin Netanyahu’s failure to type a coalition after the primary spherical of elections two years in the past. Already again then, forming a authorities with out the ultra-Orthodox was a banner problem for Liberman. The identical is true now. After the latest election in March, he fought tooth and nail towards efforts by Yamina chief Naftali Bennett and particularly New Hope get together chief Gideon Saar to incorporate the ultra-Orthodox into the brand new coalition. In the tip, Liberman bought what he needed, at the very least for the second.

As a primary step for distancing the ultra-Orthodox, Liberman launched a number of clauses into the coalition settlement, realizing that the ultra-Orthodox events would deem them problematic. These included a requirement for ultra-Orthodox faculties supported by the state to show a core curriculum (English, math and sciences); the operation of public transportation and the opening of supermarkets on the Sabbath; help for the Western Wall settlement, which might create an official area for Reform and Conservative Jews to hope on the holiest website to the Jewish individuals; an easing of the conversion course of; and the elimination of the ultra-Orthodox monopoly over kosher meals supervision.

While all of that is disturbing to the ultra-Orthodox events, what bothers them most is Liberman’s management of the Israeli financial system within the new coalition. He shall be appointed finance minister, two different financial ministers shall be accepted by him and the chairman of the highly effective Knesset Finance Committee shall be a member of his Yisrael Beitenu get together.

Former Knesset member Haim Oron of Meretz informed Al-Monitor that Liberman’s dominance of the financial sector is a major problem. “If the chairman of the [Finance] Committee is a peon of the finance minister, the Knesset will be unable to fulfill its most basic task of providing oversight to the government and taking it to task when necessary. Over the last few years, the committee has been subjected to extortion. Everyone, from every party, including the ruling party, cajoled it to get what it wanted. If the committee chair is a ‘yes-man’ of the new minister, the committee’s role in providing oversight and pressuring the Knesset to act appropriately — both necessary for a parliamentary system to function — will be lost entirely.’’

One of the greatest concerns of the ultra-Orthodox parties is that Liberman will slash the budgets of ultra-Orthodox yeshivas. These budgets are what allow young ultra-Orthodox men to stay out of the workforce and support themselves and their families with government handouts. A similar situation occurred when Yair Lapid of Yesh Atid served as finance minister in the 2013-15 government. As a result of policies, employment figures for ultra-Orthodox men rose from about 40% to over 50% by 2016, a statistic bemoaned by the ultra-Orthodox leadership. It was only after Netanyahu formed a new government with the ultra-Orthodox in 2015 and budgets for yeshivas were restored to previous levels that the rise in ultra-Orthodox employment was blocked.

The incoming finance minister gave almost no interviews in the last few weeks, once it seemed likely that a Lapid-Bennett government would be formed. He did, however, share some of his plans with Al-Monitor, saying, “This coalition will focus mainly on economic issues. Israel hasn’t had a budget for two years now. We see the unemployment figures rising, along with the deficit and debt-to-GDP ratio, and realize that the biggest challenge we now face is finding ways to restore the economy. For the deficit to go from 2.5% to 11.6%, which is where it is now, is completely unreasonable.”

He added, “Israel’s national debt now stands at about 1 trillion shekels [$308 million]. This comes to approximately 100,000 shekels [$30,800] per person, which someone will eventually have to pay. Israel must increase economic growth. To achieve this, it must increase its budget without increasing its deficit. When I become finance minister, I will call the governor of the Bank of Israel, the president of the Manufacturers Association and the chairman of the Histadrut labor union and get them talking to us. Raising taxes is ineffective. Placing the burden on people who actually work is unwise, not to mention insufficient. We need to come up with a comprehensive plan that deals with all of the components, including revenues, taxes and employment.”

Responding to questions about the Finance Committee, he said, “In order to take big steps forward, we have to keep the entire package, meaning both the Finance Ministry and the Finance Committee, under a single umbrella. The economic challenge is the most important challenge facing this government. It has always been that way. When Netanyahu implemented major policy decisions during his time as finance minister, he demanded that [Avraham] Hirschson, a member of the Likud, would be chair of the Finance Committee.”

Liberman says that he has no plans to increase the deficit to fund the budget, despite its pressing needs, and believes the key is to create growth and increase employment. He opposes raising taxes, and told his faction last week, “We have reached an absurd situation. Just 20% of the populations pays 91%-92% of all taxes, with most hired workers not meeting the tax threshold.”

He then added, “What is the first thing I will do as finance minister? I will ask all the prosperous factories and companies what they can do to add 100 new jobs. What do they need to do that? What obstacles do they face? I’ve already met with several corporations, and they’ve told me about all sorts of obstacles. If a company could add 100 new jobs, were it not for regulatory issues, we will solve that problem for them.”   

He also plans to pass a two-year budget that would cover the period up to the end of 2022, without raising taxes, while investing tens of billions of shekels in national infrastructure projects. In this, he is reminiscent of US President Joe Biden, who wants to pour vast sums into the American infrastructure. It is a common measure taken by countries that are coming out of a crisis. Investment in national projects pours money into the economy and creates jobs, and it comes at a lower cost when done in partnership with the private sector.

On the other hand, it is not at all clear how Liberman will avoid increasing the deficit while spending vast sums, without raising taxes or cutting into the budgets of the various ministries. One particularly important problem he will face is the defense budget, which now stands at $70 billion, with the Israel Defense Forces (IDF) asking for an increase as a result of Operation Guardian of the Walls. As a former defense minister, Liberman will have a hard time withstanding the IDF’s demand, but it is unclear how he will find funding, if he does agree to increase the defense budget.

The job of finance minister has all the time been difficult. Now, after two years with none price range, and with a authorities consisting of many various events with competing ideologies, the issues are solely exacerbated. In addition, as head of a comparatively small get together, Liberman might want to justify his “tough-guy” picture and assert his status as one among Israel’s most skilled politicians.

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