Ten Most Urgent Items on the New Israeli Government's To-do List

No matter what its composition, the new government will imminently face major economic challenges.

The voter has had his say, and whether he cast his ballot for the right or left, for religious or secular, for Jewish or Arab; and despite the different nuances in the messages of the various parties, the Israeli public needs an improvement in its quality of life.

Voting patterns may be sectarian, but our leaders can't use this as a basis for running the country. Pragmatism in voting is an established fact under the current election system but it is also a clear indicator of the pain felt by the Israeli public, and what might help solve it.

The new government, and the opposition as an instigating force, will face at least 10 major challenges:

1. Housing market

One of Prime Minister Benjamin Netanyahu's biggest mistakes was appointing Moshe Kahlon as chairman of the Israel Lands Administration. Housing prices didn't jump during his term in office because of policy, they jumped thanks to a decade of scarce land and cheap money that pushed investors to buy up properties. Young families who could barely even afford to pay rent found themselves shut out from the market completely.

The new government will have a broad range of options to solve the problem: significantly increasing land sales, expediting urban renewal and National Master Plan 38 projects, and developing a long-term program for building an inventory of affordable rental units. Funding can be recruited from institutional investors managing the public's long-term savings. Public interest demands the appointment of a public-minded rather than sectarian-minded housing minister.

2. Government services

Israel's high cost of living has many factors, including services provided or controlled by the government. When the government is negligent in carrying out reforms in the electricity sector, the ports, land sales and other areas, it contributes to rising costs.

The new government needs to take action in these areas. It's not just for the sake of consumers, but also because it will create jobs. Public services need to be whipped into shape in terms of quality of management and the level of services provided. Public interest demands a dedicated struggle against the economy's strongest forces.

3. Cost of living

The Israeli public had its say, not just at the ballot box but also during the cost-of-living protests: Living here is expensive – very expensive. This can be seen in many areas, from banking and financial services to gasoline and food prices.

Government intervention, which began with various committees (Trajtenberg, concentration, etc.), needs to stay resolute in dealing with monopolies and cartels that sharply drive up living costs. They need to remove obstacles and encourage the entry of new competition. Public interest demands not surrendering to interests that want to drag on with the status quo.

4. Health system

The quality of healthcare in Israel is relatively high, but the system's structure poses problems. Expanding private medicine needs to be closely monitored and steps need to be taken to ensure that people who can't afford private insurance still receive adequate care.

The long queues at hospital emergency rooms and the long waits for appointments with specialists attest to a problem that could get worse as deficits of health maintenance organizations rise, and these organizations find themselves at odds with the hospitals. Public interest demands a strong public health system with limited private activity – and not the opposite.

5. Tel Aviv light rail

Transportation problems in metropolitan Tel Aviv do all sorts of economic damage, they distort housing prices and they cause too much congestion in a space that is already overcrowded. The next government needs to push the light rail project forward in order to free the metro area from the grip of its ever-present traffic jam. It will also reduce air pollution and promote cheaper residential development further out from the city.

Jerusalem's light rail is a huge success that already serves 3 million riders a month – just like the Israel Rail intercity train system. Public interest demands a less congested, less polluted Tel Aviv metro area.

6. Equal burdens

Israeli society is heterogeneous, and it requires the building of a basic homogenous set of values based on military or alternative national service, playing a part in the workforce, and paying taxes.

Military or national service isn't just an equal sharing of the burden. It is the key to integrating Israel's two weakest sectors and liberating many children from poverty. Public interest demands that Arab and ultra-Orthodox leadership work toward integration, and that secular Jewish society, in turn, works toward absorption.

7. Reducing inequality

Economic inequality has grown over the past two decades as our economy shifted from a socialist one to a market one. The inequality is marked by the increasing use of contract labor, a low rate of participation of Arabs and ultra-Orthodox in the labor market, yawning gaps between workers with job security and those without, a jump in senior management pay, and distortions in the education system and job market.

Facing the challenges presented here will help diminish inequality. Public interest demands the nurturing of the weaker and weakening segments of society and setting quantitative goals for chipping away at economic inequality.

8. Business sector

The business sector has been shaken up in recent years, and there has been a worrying swing toward putting massive resources in the control of a few individuals who use very little money of their own. This has been accompanied by haircuts on debt payments, excessive salaries, and the weakening of companies.

But alongside the corporate pyramids and monopolies choking the economy and public, there is also a business sector that is innovative, competitive, productive and dynamic, and that sector must be fostered along with small and medium-sized businesses.

The government has an important role to play here through its ability to open up markets and create incentives for real productivity, as well as by conducting itself properly as a consumer of business services. Public interest demands a strong business sector that acts sincerely for the sake of shareholders, employees and customers.

9. Defense budget

The Israeli public hasn't the foggiest idea of how many planes or tanks the military needs. But the defense establishment needs to adapt to working more efficiently in managing and preparing for risks, as well as to the fact that the strength of Israeli society can't be based solely on a bloated and expensive defense system. It also requires other social services.

Public interest demands an honest and courageous approach to defense. More money doesn't necessarily bring more security.

10. Political settlement

It's no longer fashionable to talk about peace with the Palestinians and a political solution, but don't be fooled by the relative quiet of the last few years. Clinging to control over another nation is destructive. It is weakening us, and it will tear us apart. The economic potential of an Israel at peace with the Palestinians could jump overnight, just as it could evaporate if there is a serious deterioration in security and a third Intifada.

Public interest demands initiative, rather than passivity. It does no good to wait for the next wave of terror while declaring that there's nobody to talk to.

Moti Milrod, Michal Fattal, Olivier Fitoussi