Minister of Housing and Construction Effie Eitam has proposed to Minister of Finance Benjamin Netanyahu that Central Bureau of Statistics chief statistician be appointed arbitrator in the ministry’s dispute with the Bank of Israel. The Bank of Israel alleges that the ministry’s housing discounts and grants, including the Sharansky plan in the second half of 2001, led to higher prices in outlying areas.
Eitam rejects the allegations, and claims that surveys by the Central Bureau of Statistics prove that the campaigns increased apartment sales and the state’s tax revenues, which covered the budget outlay for the grants.
In his letter to Netanyahu, obtained by “Globes”, Eitam wrote that the timing of the Bank of Israel’s report was not a coincidence, but was designed to torpedo his plan to increase construction, on the eve of a cabinet discussion on the subject. Eitam said the survey on which the Bank of Israel relied was “incorrect and tendentious, and completely contradict the findings of an in-depth survey conducted by Ministry of Housing economists following the Sharansky campaign.”
Eitam alleges, “The Bank of Israel cannot ignore the fact that the campaign increased apartment sales by 2,080 units. It is trying to minimize the achievement by incorrectly claiming that purchases were brought forward and contractors allegedly exploited the campaign to raise prices. The Ministry of Housing had the price list of all the contractors before the campaign, and it carried out sample surveys during the sales. In only two cases did we discover that contractors had raised prices, and they immediately restored the original prices after a warning by the ministry.”
Eitam is sure that the cabinet will approve the plan to increase construction precisely because it will extend for as long as the Sharansky plan from two years ago and be based on its success. The new plan has the same aims: to help eligible home-buyers, especially young couples; to reduce the inventory of unsold apartments in outlying areas; and to encourage building starts in areas far from the center of the country, where land has already been marketed for construction.
In his letter to Netanyahu, Eitam criticized Governor of the Bank of Israel David Klein’s policies, which he claimed were hindering growth, and even “creating social tyranny”. Eitam said, “Klein recently claimed he was worried by social inequalities, but he was the person who created them, through his interest rate policy. Klein has called for growth, but his restrictive monetary policy is blocking economic progress and recovery from the protracted recession.”
Published by Globes [online] - www.globes.co.il - on July 13, 2003