Israel's Next Finance Minister: The Sane Right or a Far-rightist's Lunacy

The post is likely to go to a junior partner in the governing coalition, mostly likely the incumbent Moshe Kahlon or the Zehut party's Moshe Feiglin

Finance Minister Moshe Kahlon, who heads Kulanu, makes phone calls to undecided voters a day before Israel's election, April 8, 2019.
\ Moti Milrod

Avi Gabbay, Moshe Kahlon, Naftali Bennett or Gilad Alper (the candidate of far-rightist Moshe Feiglin)?

The results of Tuesday’s election are still an unknown, but these four men are the most likely candidates for finance minister over the next four years.

None of them belong to Likud or Benny Gantz’s Kahol Lavan – even though one of these two parties will lead the next government – because the finance portfolio will almost certainly go to a junior coalition partner.

If Kahol Lavan forms the next government, the Defense Ministry will almost certainly go to Moshe Ya’alon, with the Foreign Ministry going to Yair Lapid, That means the treasury – the third of the big three ministries – is earmarked for a coalition partner.

If Likud forms the government, it will have no choice but to give the Finance Ministry to a junior partner, Kulanu chief Kahlon, who has the job now, or Feiglin/Alper. Both Kahlon and Feiglin have conditioned their joining the government on receiving this portfolio.

The alternative is Bennett, who pines for the Defense Ministry and is unlikely to settle for anything less than the treasury if he doesn’t get it.

Likud’s top candidate for finance minister (Yisrael Katz) and Kahol Lavan’s (Avi Nisskenkorn or Ofer Shelah) will be sacrificed for the sake of forming a government.

Kahlon again?

I., a longtime treasury veteran who asked that his name not be used, worked in the treasury’s budget division under several ministers. Fiscal policy is in I.’s blood, so you’d assume that the minister responsible for a big increase in the deficit, one who made costly promises to the public, would arouse his disgust.

But asked a day before the election who he would vote for, I. didn’t hesitate. “I’m voting for Kahlon because of the first two-thirds of his term: his savings program for children, health care reforms in which patients pay only the deductible from their health maintenance organization for surgery, and requiring doctors to wait six months before they can begin seeing patients privately.”

He added to his list of Kahlon achievements the banking and credit card reforms, the easing of rules on imported food to lower prices, the reduction in import duties and the truce between the treasury and defense officials that was a boon to the budget.

He called the decision to allocate 10 billion shekels ($2.8 billion), Resolution 922, to develop the Arab community “a once-in-a-decade achievement.”

All this appears on the website of Kahlon’s party, I. notes, except Resolution 922, which he says Kahlon is playing down because it hurts him at the polls. I. praises him for his refusal to give in to lobbyists. I. thinks Kahlon is truly concerned about young couples’ ability to buy a home.

Who is Gilad Alper?

Kahlon entered into campaign mode two years ago, but he has also had to contend with negative coverage on the costly pension deal with the Defense Ministry, the widening budget deficit in recent months and his failure to decisively solve the problem of soaring housing prices.

Kahlon’s platform urges a continuation of the same policies. However, there are good reasons why Kahlon may not get the opportunity. One of them is the surprising rise of Feiglin’s Zehut party in the polls and his repeated promise to demand nothing less than the treasury for his No. 3, Alper.

It sounds hard to believe, but if Gantz finds himself unable to form a government without Zehut, a Finance Minister Alper is a distinct possibility. Kahol Lavan is willing to pay almost any price to replace Prime Minister Benjamin Netanyahu, and Alper would be a lot easier for the political establishment to digest than Feiglin himself.

Alper is secular and doesn’t share Feiglin’s religious ideology. Alper has been working in the Israeli capital markets for years, and he would be a natural candidate as deputy finance minister.

On the other hand, the establishment would find that Zehut’s call for legalizing marijuana is one of the less extreme of the party’s policies. Zehut wants to disband the Israel Land Authority, privatize government hospitals and replace public schools with private ones paid for with vouchers.

The new right’s man

A., another treasury official who served various finance ministers over a decade, says Bennett and Ayelet Shaked’s Hayamin Hehadash party has the best economic platform of all – though he admits that a party’s platform doesn’t offer many clues about what it would do once in power.

A. says the party’s ideas include “fighting the strong workers committees, legislating for mandatory labor arbitration and reducing taxes. Mandatory arbitration is one of the most important reforms on the agenda and could help the economy in a major way.”

The worst party for economic policy, he says, is Orli Levi-Abekasis’ Gesher. “It’s about the populism of wasteful public housing, and increasing doctors’ pay and the health care budget without taking into account that senior doctors have benefited the most from the health care system’s pay rises over the last decade.”

Avi Gabbay – ready and willing

Gantz’s decision to enter the race and his alliance with Lapid brought an ignominious end to Labor Party leader Gabbay’s dreams of being prime minster. What’s left is the more modest job of finance minister.

Many observers say that Gabbay is far more suited to the portfolio than any other post in the cabinet. He has a thought-out program for almost every economic-policy issue.

His flagship cause is the health care system, and over the past year he has visited 20 hospitals, each time for two or three hours, including meetings with the administration, doctors and nurses. He has also laid out plans for reforming the public sector, public transportation and the housing market.

What distinguishes Gabbay from the generals leading Kahol Lavan is that Gabbay really wants more efficient defense spending. He envisions things like a civil servant at a ministry trying to get his political masters to think in a businesslike way. But he isn’t opposed to government intervention.

If he’s given the treasury, Gabbay will wage war on the most powerful players in the Israeli economy, including the health care system and the defense establishment. In housing, Gabbay believes the state must build more. And unlike the other candidates for finance minister, he wants to reopen the framework deal that governs Israel’s natural gas industry.