Until now, it had seemed that Amir Peretz was social-minded. This week we learned that Benjamin Netanyahu is more social-minded. He easily pulled ahead of Peretz by pledging to eliminate poverty in three years. Which compares rather favorably to a mere raising of the minimum wage to $1,000.
Even if Robin Hood, Santa Claus and Baron Edmond de Rothschild banded together, they would not be able to serve up a more impressive package of benefits and presents than that proposed by Netanyahu. He began with a reduction of income tax to 40 percent, corporate tax to 20 percent, and VAT to 14 percent. Truly, the messianic era is upon us. The only little problem is that with such a significant decline in revenues, the quid pro quo is a reduction of government expenditure, imposition of economic decrees, cutting, reducing and dismissing. But there is no trace of any of this in Netanyahu's plan. After all, is there anyone who likes cutbacks on the eve of elections?
In place of cutbacks, Netanyahu speaks of meteoric growth - without any chance of actually happening - in an unstable Middle East, in a country that faces a perpetual risk of renewed intifada. And so, as to make the plan truly absurd, he talks about expanding government expenditure to a huge extent, on an unprecedented scale. Because the new Netanyahu is a magnanimous fellow. He loves the public. He proposes to encourage productivity by means of free nursery schools and free after-school child-care frameworks, a negative income tax for low-income earners, an increase in the old-age National Insurance allowance to NIS 2,400 a month, a 50 percent discount on medications for the elderly, and an annual NIS 7,200 rent subsidy for public housing. He offers university students a NIS 3,000 reduction in tuition fees, and soldiers a NIS 40,000 grant upon their release from the army, and also free plots of land in the north and south. There is a 30 percent reduction in the cost of public transit and a 10 percent increase in tax benefits in the geographic periphery. And the list goes on.
It's a bit hard to keep track of the bountiful cavalcade of benefits, so here is an example of the reduction in college tuition. It sounds great, but it will also destroy the universities. Because the tuition fees constitute some 20 percent of their budgets, and reducing it by a third will adversely affect research, which already now barely subsists - and experience has proved that the government does not make up the shortfall. In any case, why reduce tuition if the soldier will be leaving the army with NIS 40,000 in hand? Let him take the money and enroll in university. What's more, there is also the slight matter here of consistency. When Netanyahu was finance minister, he planned with Limor Livnat "differential tuition fees," the practical meaning of which is an increase in tuition fees. Adoption of the plan was thwarted at the last minute by the Labor Party's entry into the coalition. If so, how was the tuition supplement suddenly transformed into a reduction?
Another example: tax benefits in the periphery. These benefits were slashed because they were shown to be ineffective. They make the wealthy wealthier and waste the taxpayer's money. Why repeat a past mistake? Because there are a lot of voters in the periphery. And who could object to raising old-age allowances? Only those who remember that Netanyahu did not include them in the proposed budget for 2006, because back then he still took into account the limitations of the budget.
All of these wonderful programs would cost NIS 6 billion a year. Where would the money come from? Netanyahu solves that riddle easily. Two billion will come from increasing government expenditures by 1 percent - except that he has apparently forgotten that these two billion are already earmarked for expenses deriving from automatic population growth. Another two billion will result from greater efficiency in government procurement. Blessed are the believers. And another two billion will come from the defense budget. So very simple.
Until now, not a single prime minister has succeeded in cutting the defense budget, Netanyahu included. But what's wrong with writing two billion? After all, it goes hand-in-hand with his outlook on defense. He will fight terror, will bomb the Iranians, will annex 50 percent of the West Bank, will teach Hamas a good lesson, will build the iron wall of Jabotinsky around Israel- and will cut the defense budget, too. It makes sense, no?
Criticism aside, however, many sections of the program bear a certain logic. They are heading in the right direction of encouraging employment and granting assistance to those who cannot work. The problem has to do with the dosage, the colossal sums, the unfounded pledges, the lack of fiscal caution, the danger of a rupture of the budgetary dam that will end in tragedy.
Nevertheless, experience has already proved that Netanyahu knows the Israeli voter better than all the pundits. He knows that everyone is looking for some big hope, a chance at the impossible. That one day we will pick the winning lottery ticket, or get our hands on a share in the stock market that will make us millionaires. Netanyahu is relying on this hope. Because if he succeeded in mending the economy in three years, why shouldn't he be able to make a miracle and eliminate poverty in three years? Wait a second - why not in three months?
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