"People have more money in their pockets. We've broken the cartels and monopolies. That is what is creating jobs and growth. We must not scatter state money on the wrong things, and there is no need to levy too high taxes in such a way that it is not worthwhile working," said Prime Minister Benjamin Netanyahu at a special press conference today with Minister of Finance Yuval Steinitz and OECD Secretary General Angel Gurria.
"Israel's economic performance is better than OECD economies, and among the best in the world," continued Netanyahu. "We've created 250,000 new jobs in the past three years. This happened because we've controlled our spending, and not let the deficit balloon, and also because we did not raise taxes too high because we know that we'll get more tax revenues if tax rates are lower."
Netanyahu said that the government adopted the Trajtenberg Report's recommendations to lead social change and reduce poverty. "Our policy is right - anti-cartel and social justice. It's impossible to achieve social justice without growth. Israel has kept this balance. We very successfully passed through a huge crisis almost better than every OECD country. We've also created a quarter million jobs, we've grown and we've reduced the debt. We've managed this responsibly and reduced poverty."
Netanyahu said that Gurria told him that Israel should pursue its current policies, and that the global crisis was not yet over.
Steinitz said, "Gurria told us that things are still dangerous. He came here to warn us that the crisis is still extant. We received a severe warning that there is a global economic war, and that there are a lot of risks, including in Europe. The crisis may worsen. That is why protecting the economy against the failures of other governments, like Italy and Greece, is a key objective. To achieve this, we must stick to the policies of maintaining the budget framework and a reasonable deficit. This is a necessary condition for keeping the achievements. Gurria said that it would be dangerous if we don’t keep the budget frameworks and expenditures."
Asked about the tax hikes planned in the 2013 budget, Netanyahu said, "The budget will be expanded; the question is by how much. We also know how much; the question is whether it will be expanded beyond the transition. The budget will not grow to the point that we'll be able to do everything. But we're preserving the framework. That is the most important thing in the world - the ability to keep a responsible economic framework - and that is what will give growth."
Published by Globes [online], Israel business news - www.globes-online.com - on June 5, 2012
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