Finance Minister Benjamin Netanyahu is convinced that his economic policies are working, so much so that he has convinced the government that any new coalition partners must fall in line with them.
Speaking yesterday at the Israel Business Conference 2004, which is being sponsored by Globes, Netanyahu declared: "The economic revolution that I have led together with the prime minister will continue. Anyone who joins the government will have to accept our policies, which encompass 20 structural reforms. Two of the most important of the reforms are in the ports and the capital market [the Bachar committee]."
"On Thursday," he continued, "I met with representatives of one of the three top credit-rating agencies in the world. They were happy with our policies and generally had no comments to make. `Just one question,' they said. `Will these policies continue?' I will continue to watch over the state coffers. While guarding the budget is a necessary requirement, it is not sufficient for growth. One can talk about the engines that motivate people to work, to manufacture, to invent and to develop products. Satisfaction could be one such engine, but the main motivation for people is to earn more money. Whoever understands that, will reach growth. Our policies are geared toward growth. We are lowering taxes to provide more motivation for people to work, and cutting down on state welfare so that those who were not part of the circle of labor will join it."
While extolling the virtues of his economic policies, though, Netanyahu admitted that the situation could get worse before it gets better.
"No country will create growth through increasing handouts and raising taxes. Most of the countries leading in growth are of similar size to us and they were not there a few years ago. Next year the problem of poverty could worsen, but we must carry on this path, because only growth will cut poverty. It is difficult to lead such a policy, I know. For politicians it is even harder, because it is not popular.
"We laid off 200 deputy mayors, and do you know who stands at the head of their committee? [Ra'anana deputy mayor] Uzi Cohen from [as satirized on the TV show] `Eretz Nehederet'! I am willing to stand up before the Likud central committee, before the Histadrut and even before the banks who have joined with the labor unions against the Bachar committee. Anything they throw at me will not budge me. Now everyone from all over is coming to us to learn how we managed to carry out our pension reforms. I'm told that reforms such as the Bachar reforms have not been seen anywhere in the world. So they'll come to learn that, too!"
But the finance minister's planned revolution for the state-owned sea ports is currently on hold. How does he explain that?
"I've been told that these reforms must be conducted through negotiation. Four finance ministers before me, Likud and Labor, tried talking, and in any case the Histadrut won, and we have the highest number of strike days in the world. Had we taken the path of talks, we would not have succeeded on the pension reforms. I am ready to talk, but on the condition that the reforms pass. No negotiation is going to stop the reforms.
"At every port in the world, the ship comes in, unloads, moves on. Only here do they wait 14 days. So now the workers are dragging out the talks. `Maybe the minister will be changed.' `Maybe the government will fall.' There are no other ports in the world that operate like this. We will not be the last dinosaurs. There's no more Jurassic Park.
"Do you remember the fat guy and the thin guy?" Netanyahu asked his audience, referring to his old metaphor for describing how the private sector carries the bloated public sector. "Well the fat man is less fat and the thin one is stronger. We're a third of the way along. There's no going back, you cannot stop the revolution. Taxes and handouts are not the alternative. You can splash all over the TV and papers items about a poor family where both the husband and wife have jobs. You can find such a family, but the probability is low. But where both parents don't work, the chances they live under the poverty line is 70 percent."
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