Bank of Israel Governor Dr. Karnit Flug was asked today by “IDF Radio" (Galei Zahal) about reports that Minister of Finance Moshe Kahlon will not support her for a second term. "I'm not thinking about that. There is a lot of time and much work to be done before November (when her first five year term ends) so I'm not thinking about it."
Flug rejected claims that she does not give enough credit to Kahlon for his achievements. "The macroeconomic situation is good also because of the Ministry of Finance's policies."
She said, "There is importance in keeping the status of the Bank of Israel as an independent body outside of the political system. Overall we are successfully preserving the status of the Bank of Israel although here and there we certainly find challenges on this matter. I think that the positions of the Bank of Israel are very clear on comments by decision makers and certainly when it comes to public discussions. I think that we influence very many things even if our position is not accepted exactly as it is written or said."
On the buyers price plan for housing (mechir lemishtaken) Flug said, "It's still too eraly to judge if the plan will prove itself. There were flaws that have been corrected along the way but I think that the plan can only be judged in the long term"
Flug reiterated her opposition to further tax cuts. "Cutting taxes will bring about one of two things. Or it will be difficult to continue increasing social expenditure on all sorts of very important issues that the Ministry of Finance has begun handling in the past year and rightly so, or these things will happen but with an increased deficit. Both outcomes are problematic because I think there are big challenges in areas like education, professional training, the health system, infrastructures, public transport and other infrastructures that require increased public expenditure, and that despite higher allocations are still low by international comparison. "
Published by Globes [online], Israel business news - www.globes-online.com - on March 29, 2018
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