Needed: A Reformer as Finance Minister

Since the series of reforms led by Benjamin Netanyahu in 2003, which infused life into the economy and put it on the fast growth track, we’ve had 10 years of treading water.

Nehemia Shtrasler
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Gilad Erdan, a possible Likud pick for finance minister, showed good reformer's instincts as communications minister. Credit: Ofer Vaknin.
Nehemia Shtrasler

Who is worthy of being the next finance minister? Manuel Trajtenberg, Moshe Kahlon or Gilad Erdan?

The job requires a strong, courageous person who understands economics, who has a power base in his party, who isn’t afraid of labor unions or wealthy businessmen, who believes the budgetary deficit must be reduced and mainly – he must be a reformist in character.

Since the series of reforms led by Benjamin Netanyahu in 2003, which infused life into the economy and put it on the fast growth track, we’ve had 10 years of treading water. This is the “lost decade,” in which no important reforms were made. Everything was put off due to cowardice and political considerations, so that today the economy is crying out for a finance minister who will shake the inert reality and march the economy forward to better years of rapid growth and narrowing gaps.

As far as reforms are concerned, Yair Lapid was a huge disappointment. He entered the finance minister’s office with a clear strategy of “not fighting with anyone” – except the ultra-Orthodox. When the treasury’s budgetary division officials pushed him to carry out reforms, he said, You don’t understand politics. He didn’t want to open a front against any strong group in the economy, he only wanted everyone to love him.

That’s why he surrendered without a fight to former Histadrut chief Ofer Eini and didn’t carry out the necessary reform in the public sector. He didn’t deal with the low pension deductions of the privileged public sector groups eligible for a generous state pension, or cancel the VAT exemption on fruit and vegetables. He didn’t raise women’s retirement age or deal with the last dinosaur – the “Israel Lands Authority.” Nor did he streamline the Electric Corporation, reduce the enormous taxes imposed on dairy products, beef, poultry, fish, tuna, olive oil, honey and fruit and vegetables.

So is it any wonder that growth is slowing down, the deficit is rising, housing prices continue to rise and food prices remain sky high?

Trajtenberg, the Zionist Camp (Labor and Hatnuah) candidate for finance minister, understands the economy, but favors increasing government expenses and raising taxes. This is a problematic policy that leads to deficits and crises. The report he submitted following the social protest consists of several reforms, but is Trajtenberg brave enough to face the Histadrut, the unions, the tycoons, farmers and industrialists?

He has another problem – he has no political power in his party. He was put on the list by the grace of Isaac Herzog and Tzipi Livni, so he will have difficulty standing up to them when necessary.

Moshe Kahlon has proved he is a reformist, from his days as communications minister. But his main activity was against the very wealthy, which is much easier than facing up to strong unions like the Electric Corporation workers and pressure groups like the farmers, who can slander him, claim he is “anti-social” and even call a strike that would paralyze the economy.

Gilad Erdan has already proved himself capable of facing strong unions. He dissolved the Broadcasting Authority despite the media intifada that its 1,800 workers waged against him. A day before he left the Communications Ministry he signed a reform in multi-channel broadcasting that enables Cellcom to compete with Yes and Hot. He even reformed the old national postal service, Israel Post, which will streamline it and lead to the retirement of 1,200 people – a clearly unpopular move.

Erdan has another advantage – he won first place in the Likud primaries, so he has earned his status and does not need Netanyahu’s favors.

In any case, the economy is crying out for reforms, which are the high-octane fuel required by the growth engine. So we must pray for a finance minister who has reform running in his arteries and wants to go down in history as one who changed Israel’s economy.