Subscribe to Print Edition | Tue., November 25, 2008 Cheshvan 27, 5769 | | Israel Time: 09:21 (EST+7)
Haaretz israel news English
web haaretz.com
Haaretz Toolbar
Diplomacy
Defense Jewish World Opinion National
Print Edition
Car Rental
Books Haaretz Magazine Business Real Estate GA 2008 Travel Week's End Anglo File
Comments:  2
Last update - 07:14 20/11/2008
Finance minister reveals NIS 25 billion stimulus plan
By Moti Bassok and Haim Bior
Tags: Stanley Fischer, israel news 

Finance Minister Roni Bar-On introduced an NIS 25 billion economic stimulus plan Wednesday, which was greeted by open opposition by many and grudging applause by few.

Global economic growth will severely slow in 2009, Bar-On said at a press conference yesterday; the plan's purpose is to minimize the damage to Israel and help it overcome the crisis quickly.

Not everybody agreed that it would work. While Prime Minister Ehud Olmert and Bank of Israel governor Stanley Fischer supported the plan, Big Labor did not. "It isn't an economic program, it's a CYA program," said union leader Ofer Eini, threatening to call a nationwide strike to protest it.
Advertisement
Meanwhile, Shas and Labor sources vowed to foil the plan's passage through Knesset unless it underwent substantial rebalancing. "We are increasing total investment by the government and its corporations to
NIS 21.7 billion, an increase of 41% compared with the scope of investment in 2008," Bar-On told the members of the Social and Economic Affairs cabinet.

"I know that with this program, I step into the center of the political jungle. The claws were out and arrows were aimed before the program had even been presented, and certainly before it had been studied."

The plan is four-pronged: 1) Accelerated NIS 10 billion investment in infrastructure (from 2010), 2) Credit: Arranging NIS 1 billion credit for medium-sized businesses, NIS 550 million credit for exporters, NIS 180 million credit for small businesses, 3) Addition of NIS 350 million to state investment in research and development and 4) Strengthening the labor market by training and hiring subsidies.

Olmert told the assembly that his government had managed the economy responsibly, putting Israel in a good starting position to cope with the crisis. Olmert said his main concern was people squirreling money away. He urged that a package deal be reached, including a lifeline for pension funds, and approval of the 2009 budget as is, without fiddling.

Fischer applauded the plan and said the Finance Ministry did well to allow the tax cuts plan to continue. The government deficit will be higher than foreseen in 2009, Fischer said, but it must not be allowed to pass the boundary of 3% of gross domestic product.


MK Avishay Braverman of Labor, chairman of the Knesset Finance Committee, wants an alternative plan based on a bigger budget. "I call for an immediate assembly of representatives from unions, employers, the Bank of Israel, the Finance Ministry and the government to create an alternative plan and pass it through the Knesset," Braverman said. As for assistance to pension funds, the ideas Bar-On presented were "too little, too late."

The Finance Committee meets next week to discuss Bar-On's plan, which at the moment does not enjoy majority support. Representatives from Shas, Labor, Likud and Meretz are all demanding that the program be expanded. That may have to happen. Shas leader Eli Yishai is demanding more help for people to buy homes, for one thing.

Ofer Eini: 'Insane ideas'

Ofer Eini, chairman of the umbrella Histadrut labor federation, had no good words for Bar-On's stimulus package. "This isn't an economic emergency program, it's an economic cover-your-ass program," he said. "If you study the plan in depth you find it has no solutions to the crisis looming over the economy, especially not for the workers with the ax on their necks and their savings eroding by the day."

The plan offers no safety net for pension savings, Eini added, an issue for elderly workers who find they have to retire on much less money than they'd thought. Nor, said Eini, did the treasury find a solution to prevent layoffs, only ideas for workers already dismissed, some of which he said are insane, such as turning fired high-tech workers into school teachers.

Nor does the finance minister ever bother to say where "the grandiose sum" of NIS 22 billion (or NIS 25 billion) would come from, the labor leader said. "As the minister is unwilling to increase government spending, it will come from budget cuts," he said.

Bar-On told the Social and Economic Affairs cabinet yesterday that he is confident Eini and Braverman will understand the need for the stimulus.

Related articles:
  • Send laid-off high-tech pros to teach science, Bar-On to propose
  • There is another economic discourse
  • Merrill Lynch: Israel less vulnerable to economic crisis than U.S. and Europe
    • Bookmark to del.icio.us  
     
    Spy chain
    Iran: We smashed espionage network linked to Israel.
    Poultry dilemma
    Will U.S. Jews have kosher Turkey this Thanksgiving?
      1.   The Histadrut can destroy Israel more thoroughly than all enemies 09:59  |  S 20/11/08
      2.   Guaranteeing pensions 08:28  |  Michael 25/11/08
     Read & React
    Yossi Sarid: Is Shas' Rabbi Ovadia Yosef also an ass?
    Responses: 62
    Aide: Ex-IDF chief did not call for Ahmadinejad to be killed
    Responses: 187
    IDF: Retaking Gaza will cost Israel NIS 17 million a day
    Responses: 147
    Report: Gaza militants agree to cease rocket fire if Israel opens crossings
    Responses: 105
    Poll: 70% of Israeli Arab women think slaps are not domestic abuse
    Responses: 71


    More Headlines
    03:18 Olmert: History will owe Bush for setting Mideast on path to peace
    09:08 Documents obtained by Haaretz reveal rift among Hamas leaders
    09:08 Report: Israel willing to release more prisoners for Gilad Shalit
    09:09 ANALYSIS / General elections are Gilad Shalit's greatest hope
    09:18 Verbal assault on Israel expected as UN marks Palestinian Solidarity Day
    02:44 Shas to seek payout for Jews deported from Arab countries
    09:19 New figures show crisis spreading into Israel's economy at large
    02:35 Now you can get the Koran on your cellphone
    08:16 ADL condemns Shas Rabbi Yosef for terming secular teachers 'asses'
    00:40 Reported cases of domestic abuse among immigrants in Israel at its lowest
    03:44 600 jobs waiting today for English speakers at Tuesday's Jerusalem job fair
    03:50 Group of academics to accuse Scandinavian countries of Anti-Semitism
    04:08 Pilots: Air safety downgrade will seriously impact Israel's aviation industry
    04:16 Tax authority refuses to help fighting organized crime due to workers' demands
    Previous Editions
    Special Offers
    Advertisement
    Living in Israel Studying in English
    Click & Meet our students from all around the world
    Living in Israel Studying in English
    Click & Meet our students from all around the world
    Dan Boutique Jerusalem
    New Dan Hotel in Jerusalem Young, Fun & Distinctively Dan Book Now Online!
    Fattal Hotel Chain
    Perfectly located hotels on best resorts of Israel.
    Car rental in Israel
    Shlomo Sixt Receive $15.00 from our low rates.
    Dial 013 for your long-distance calls
    and get all your money back
    US CITIZENS
    Vote for real change. Request your ballot today!
    Eldan Rent a Car
    Israel's leading car rental company offers you a 20% discount on all online reservations
    Jewish Singles Personal Ads
    Find the love of your life on JDate.com
    Israel's Premier Real Estate Website
    www. israel-property.com
    Hebrew Summer courses
    From $39.95
    Junkyard
    Junk a car - get free towing nationwide and a tax-deductible receipt
    Home | TV | Print Edition | Diplomacy | Opinion | Arts & Leisure | Sports | Jewish World | Underground | Site rules |
    Real Estate in Israel | Travel to Israel with Haaretz | Hotels Israel | Restaurants Israel | Tourist attractions Israel | Shops Israel
    birthright Israel | Search engine marketing
    Haaretz.com, the online edition of Haaretz Newspaper in Israel, offers real-time breaking news, opinions and analysis from Israel and the Middle East. Haaretz.com provides extensive and in-depth coverage of Israel, the Jewish World and the Middle East, including defense, diplomacy, the Arab-Israeli conflict, the peace process, Israeli politics, Jerusalem affairs, international relations, Iran, Iraq, Syria, Lebanon, the Palestinian Authority, the West Bank and the Gaza Strip, the Israeli business world and Jewish life in Israel and the Diaspora.
    © Copyright  Haaretz. All rights reserved