"There are bad data, but there are also good data. We're holding a round table in order to see what to do, and exchange ideas. We're preparing a growth package for the upcoming budget, and we'll deal with it. One idea is to change the tax rates, and another is to encourage enterprises in outlying areas. In Italy, for example, the government makes three years of pension payments for a new business. That's another idea. There's no budget problem in dealing with the economy. There's NIS 246 million, and this plan will go. Everything will come; what we promised will happen," Minister of Finance Moshe Kahlon told "Globes" editor-in-chief Hagai Golan today at the "Globes" Capital Market Conference at the Tel Aviv David Intercontinental Hotel.
"We haven't sounded the all-clear, but we're working. There's a deficit of NIS 11 billion on the spending side and NIS 3 billion on the revenue side. This gap has to be covered. We'll cut costs and make adjustments, and we know how to do it. We'll get through it. The economy is strong and stable. Unemployment is low. The ratio of debt to GDP is very low. The 2019 deficit will be zero. Why? Because of the numerator."
Golan asked Kahlon about the financial sector executive salary ceiling, the responses in the market and the banking system, and criticism of how the measure was enacted. Kahlon answered, "This is an important law, and we're not the first ones to do it. It's a serious law, and I don't accept the criticism. We took this law from the US. It's $1 million there. I lowered it to NIS 2.5 million. You can't call everything you dislike demagoguery. Work was done on this issue. The former minister of finance formed a committee, which worked on the matter, and we continued it from there. Also, it won't be retroactive. There's already interpretations here. I meant it to apply from the enactment of the law, not retroactively. That's what I believe in. This discussion should not have taken place the way it did, but I'm satisfied with the law." Asked whether he planned to apply the law also to all public companies in the next stage, Kahlon answered, "There's no plan to apply it all public companies. No. Companies have nothing to worry about, and it won't happen as long as I'm minister of finance. I suggest that they believe me. Asked whether he had marked the banks and bankers as a target, he answered, "They don't have to feel threatened. If someone's pension stands to be affected, maybe that's a reason for leaving, but there's no reason to feel threatened. The banks are working and the economy's working. I didn't mark anyone as a target. I have only one goal - the public. I'm not working for the industrialists, or the banks, or the farmers, or any one person. I'm working for the public."
Concerning the cost of living, one of the key issues the government is dealing with, Kahlon said, "Besides housing, the main problem is food. Before the holidays, we went into action, and it worked. We'll continue opening Israel to imports. I hope that the cornflakes reform will take effect within a few weeks. It will open competition to imports, and have a dramatic effect on food prices. Ahead of the next budget, we'll allow more imports. It's no secret that we paid less for tomatoes on Passover than last Rosh Hashana (Jewish New Year). It's not a pipe dream. Meat, too, and we'll go on opening things to imports, but together with the farmers, because we don't want to destroy agriculture." About banking and the Strum Committee, Kahlon said, "Strum has finished his work, and we'll present this to the cabinet. A summary of the bill is being written right now as we're talking, and I hope it goes ahead. They talk about almost no capital adequacy requirements for new players. There will be a dramatic change in the opportunity to open a new bank, and the Supervisor of Banks has promised to separate the credit card companies from the banks, and a short procedure for opening a new bank. That will be a drama - maybe not a big one, but a drama."
Kahlon also responded for the first time to reports about incoming Channel 10 chairman Rami Sadan's statements against Shas and its chairman, Minister of the Interior Aryeh Deri. He said, "If he really said it, it was serious and unfortunate. He owes Deri and Shas voters an apology. If he doesn't apologize, we have to find out who appointed him. I tell all public figures that there are enough rifts and divisions in society, and there's not need to make things worse. As Rabbi Shimon Ben Shetach said, 'Wise men, be careful with your words'."
Published by Globes [online], Israel business news - www.globes-online.com - on June 7, 2016
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