2013 has drawn to a close, making this the right time to summarize and complete the plan for 2014. Businesses from across the spectrum are in the midst of calculating their operating results for the past year and presenting their plans for the next 12 months, including projected sales, estimated workforce needed, the necessary resources, allocations for marking, and so forth. Everyone is working hard to start the new year on the right foot in the hope of ending with stability, certainty, and handsome profits.
This raises an interesting question: is it possible that all the hard work of many enterprises so far will be rendered unnecessary? This is because it seems that at the last minute the Ministry of Finance boys are making another change to the rules of the game, even though the 18-month state budget was approved only in June. Now, just six months after the budget commenced, we are being told that it is no longer current and that alternatives are being considered. While it is important to adjust plans to reality, especially in economics, but frequent zigzags and U-turns risk harming businesses and the self-employed.
After months of prophecies of doom and talk about the huge deficit bequeathed by the previous government, we are now being told about a budget surplus of NIS 30-40 billion. What will the Ministry of Finance’s captains do with this surplus? Will they channel it to strengthening the main growth engine of the economy - the business sector? For example, will they deal with the planned companies tax hike, which is liable to harm growth and reduce Israel’s attractiveness as a target for foreign investment? In other words, if the treasury’s coffers are spilling over, why not reduce the companies tax and encourage jobs, growth, investment in the Israeli economy, and encouragement of manufacturing and exports?
There are many measures that can be made in the economy, most of which are simple to enforce and not too expensive for the government. On the contrary, they will improve the overall balance of payments. For example, the simple measure announced last week to allow companies which collect payment through credit card companies will henceforth receive the cleared money daily, and not once a month. This is a measure with a financial significance of NIS 150 million, which will work directly for businesses. In the same breath, if the credit card companies are required to issue and collect by the debit method, businesses’ cash flows will further improve, saving them many financial costs.
There are other measures which the Ministry of Finance could promote to immediately improve businesses’ condition; decisions which could drive the business sector forward with real hope for the new year, which is already expected to be challenging. Even Minister of Finance Yair Lapid has admitted, just eight months after taking office, that he had assessments which have turned out to be inaccurate. Lapid should be praised for his honesty, which is uncommon in our region, and he will earn more praise if he has the guts to send the 2014 budget back to the Ministry of Finance’s offices for a few days to have its priorities revised for the sake of the business sector, which provides the livelihoods of us all and contributes to the economy’s growth.
Amir Bramly is the chairman and CEO of Rubicon Business Group
Published by Globes [online], Israel business news - www.globes-online.com - on January 5, 2014
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