"I drove from Jerusalem to Herzliya, and as it did for the Governor of the Bank of Israel (who complained yesterday about the congestion on Israel's roads) it took me an hour and a half. Is that because politicians don’t like investing in roads? No. It's because the Ministry of Finance Budgets Division doesn't like investing in roads," Prof. Avi Simhon, chairperson of the National Economic Council, said at a conference held by the Aaaron Institute for Economic Policy in the Interdisciplinary Center Herzliya. The Governor of the Bank of Israel made his remarks about traffic congestion at the opening evening of the conference. It was announced officially yesterday that, after five-and-a-half years, Simhon will shortly step down from his post.
Simhon was asked whether the combination of a transfer of powers from the Ministry of Finance to the Ministry of Economy and Labor, and the attitude of former minister of finance Israel Katz to Ministry of Finance officials, had not hurt the country. Simhon replied, "They tell us, you want to invest in roads? Cut education spending, cut spending on the haredim. How much is it possible to cut from the haredim?"
Simhon continued, "This method, whereby we gave the keys to the Budgets Division, is very bad. There's a complicated game here, and it reached a peak in the coronavirus pandemic. The Budgets Division decided that what we needed was to take a deep breath, wait for the crisis to pass, and to get up again and continue from there. In 2008, it worked really well. They thought we should do the same thing. I thought, and fortunately the prime minister and the minister of finance thought the same, that this was not the right solution/"
Simhon added that "the Budgets Division put so many barriers in the way that it was impossible to work with them."
Commenting on the criticism of the "grant for every citizen" program at the time of the pandemic, Simhon said, "Had we announced a cut in the rate of VAT during the crisis, it would have made sense. There were many countries that did that. But when you give 750 shekels to every citizen, it's less money. Reducing the rate of VAT is much more aggressive than a grant for every citizen, which hadn't been done before, and so people didn't think about in in depth."
Published by Globes, Israel business news - en.globes.co.il - on June 22, 2021
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