"50% of Israelis earn less than NIS 7,000 a month. That is the approximate median salary. With those figures, I have to help those going to work earn a dignified living. Those who choose not to work chose to live in poverty by staying home. I don't have to help them. I have to help those going to work to cope with the cost of living. Not everyone is a high-tech engineer. I have to help with the cost of living," Minister of Economy and Industry Eli Cohen said today at a conference in Eilat of the Institute of Certified Public Accountants in Israel.
Cohen said that the way to deal with the cost of living was to encourage business. "I'm in favor of businesses making money. I'm doing a lot to change the anti-business atmosphere. I meet many companies and businessmen around the world, and tell them that I want them here. There are quite a few MKs, one of whom ran for head of the Histadrut (General Federation of Labor in Israel), who talk about the need to deal with health, education, and welfare. These are worthy causes, but getting money to invest in these things requires investing in business in order to bring companies here. Every company that opens here shortens the line for MRI scans, and brings jobs, revenue for the economy, and so forth."
Cohen was speaking at the opening session of the 35th annual conference of the Institute of Certified Public Accountants in a one on one talk with journalist Yehuda Sharoni. When the moderator asked him whether the exporters, who complain about exports declining and make a noise about their plight, were merely making a fuss about nothing, he answered, "You can't confuse me with figures. Exports actually went up 2.5% in the first quarter of the year, despite the strong shekel. That means that exports went up more in real terms.
"There are issues that must be addressed, like professional training, for example, but we have good problems now. I prefer a good debt-to-GDP ratio, with unemployment at its lowest point in 30 years, and seeing how I can handle the exchange rate. That's our situation now. I very much appreciate (Manufacturers Association president, E.L-W.) Shraga Brosh, but some of his complaints are inaccurate. We cut taxes for the business sector by NIS 11 billion. We lowered the companies tax and lowered VAT."
Cohen was also asked about the Law for the Encouragement of Capital Investments - whether it was right to keep low tax rates for companies meeting the law's criteria (6-9% corporate tax, instead of 24%). He said, "We're going to provide certainty, and it will be in one thing - the trend in tax matters will be in only one direction - lowering taxes. International companies come to Israel because we cut taxes. Once, they came to Israel because human capital was good; today, they come because of the 6% tax rates in the Law for the Encouragement of Capital Investments. We want to make sure that they open more plants, because we aren't thinking only about state revenue from corporate taxes, but also about tax paid by the employees, workplaces that are opened, etc."
Cohen added, "Lowering the tax rate has proven itself. Growth reached 4%, and unemployment is way down. We're in a good situation."
In view of Cohen's remarks, Sharoni asked him, "If everything is so good, why did you need a tax on a third housing unit?" Cohen answered, "I believe in the free market. I worked in the public sector, and I can help my children, but a young couple today can't outbid someone 50 years old who invests in housing. It's not a fair fight. At the end of the day, investments in real estate mean that young couples can't buy an apartment."
Published by Globes [online], Israel Business News - www.globes-online.com - on June 5, 2017
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