Likud chairman and former Finance Minister Binyamin Netanyahu told the Israel Manufacturers Association Thursday he will cut the income tax rate by nearly 20 percent over the next four years. He also vowed to ease credit by using $4 billion in United States loan guarantees that remain in the government coffers.
Campaigning on the strength of his reputation of having helped pull the economy out of the doldrums and into unprecedented growth and stability until the current financial crisis, he vowed to protect jobs, savings and corporate health.
"We are in a very deep crisis, which is already threatening the jobs of Israeli citizens. There is a danger of tens of thousands being fired, not thousands, and if we do not act quickly, even more," he warned.
Netanyahu also promised to lower government costs in sectors run by monopolies, such as Israel Electric Corp. (IEC), the Airport and Port Authorities and the Mekorot water company. Earlier this week, it was reported that workers' salaries in the monopolies average tens of thousands of shekels a month, with a forklift operator earning more than 50,000 shekels a month.
However, stiff union resistance thwarted his plan to private government monopolies when he was Finance Minister in the Sharon government.
Barak opts for deficit
Labor party chairman Ehud Barak outlined to the manufacturers his plans to inflate the government deficit if chosen by the voters to lead the government, although polls show that Labor is running a distant third or fourth.
"This is the time… for investments in infrastructure and research and development, and for retraining workers and creating growth for the stage after the crisis," Barak stated. He maintained that it does not make any difference if the government budget is four percent or seven percent of the gross domestic product (GDP).
The American government has conditioned loans for Israel on the government's holding the budget to less than three percent of the GDP.
Barak also criticized Netanyahu, saying that no one believes he can find a solution to the financial crisis because "Netanyahu believes in the [economic] path that collapsed."