How the parties will tame the deficit

• Date: 11 March 2021
• Published date: 11 March 2021
• Author: Shirit Avitan-Cohen

Likud: Waiting for the Economic Arrangements Law and looking to the Abraham Accords

While the Likud party refused to present an orderly plan at "Globes'" request, Minister of Finance Israel Katz (Likud) has already announced that he does not intend to raise taxes, but he has not stated how he intends to narrow the deficit.

Likud claims that the Economic Arrangements Law that has not made progress because of the lack of a budget contains provisions that will lead to greater efficiency and investment in the country, a lower cost of living, and job creation, as well as dealing with the housing problem. Likud also mentions the Abraham Accords with the UAE and Bahrain as generators of new revenue and investment for Israel.

Yesh Atid: Widen the debt:GDP ratio; an economic package deal

Yesh Atid seeks to deal with the problem by widening the government debt:GDP ratio to 82-85% (which is lower than the European average) and "to invest much more in the health system, education, higher education, work training for haredim and Arabs, and in young people who want to set up business ventures." Yesh Atid also proposes to cut the number of government ministries to eighteen, and to put together a package deal for the economy in conjunction with employers' organizations and the trade unions in which pay will be frozen and more flexible employment laws will be introduced.

"Instead of raising taxes, we will deal with the deficit by accelerating growth engines, from massive promotion of professional training focused on groups that do not work, to switching employment to technology industries. We will raise the number of people employed in innovation, which accounts for 9% of the workforce today, to 15% within three years, and to 20% within five years," the party says. Its platform also states that it will invest massively in infrastructure, principally digital and scientific infrastructure, that will help in making the economy grow. "We shall engage with the hedge fund industry, a market that Israel is not part of. We shall adapt the taxation laws to the hedge funds, which will attract capital and employers."

Yamina: Cut the fat from the public sector and lower taxes

Yamina is sticking with the plan that it presented a while ago, the Singapore plan. The plan proposes a dramatic tax cut for working families and business owners, cutting back regulation, which according to the party is stifling the private sector, and streamlining of the public sector.

The sources for...