The Manufacturers Association of Israel's 2013 Manufacturers Conference opened on Wednesday at the Herod's Hotel in Eilat. The conference shifted into high gear this morning, with speeches and conversations with Minister of Finance Yair Lapid, Manufacturers Association president Zvika Oren, Minister of the Economy Naftali Bennett, and many others.
Manufacturers Association CEO Amir Hayek said in his speech, "Manufacturers have had a terrible feeling lately. If you're successful, you're a thief; and if you fail, you're an idiot. This is a terrible feeling. The rules are constantly changing on us; it's impossible to work this way. The bureaucracy is killing us. We feel that no one is listening to industry today."
Responding to a question by moderator "Globes" editor-in-chief Hagai Golan, Lapid said, "I went to the elections in order to deal with the basic constituents of the Israeli experience. I am not a cynical man, and I have a mission. I'm not concerned, and I don’t care about polls. I do what I believe in. Polls come and go."
Golan: Do you think that the Bank of Israel should do more about the exchange rate?
Lapid: "To weaken the shekel, the Ministry of Finance has also recently acted in this area. This is very important for industry. I recently met with the governor, and we spoke precisely about this matter. Among other things, the exchange rate is the price we're paying for a strong economy, and we have a strong economy, but we have to act in this area.
"We must recognize the limits of our power. We're part of the world. We're examining ways and options to weaken the shekel. There is no magic solution. This is daily trench warfare."
Lapid added, "I listen to everyone, and I am trying to get ideas from everyone possible."
You recently said that trickle-down economics doesn’t work. So what can be done?
"We're increasing investment in vocational schools and we plan to do much more. I don’t oppose tax breaks. If Intel doesn’t build a fab here, but in Ireland, there are now thousands of Irish who are earning a lot of money and paying taxes to the Irish government, instead of in Israel. This is madness. So we have to look at exactly what's best for the economy.
"We have an overdraft. We had a huge overdraft, and we now have a smaller overdraft, but there is still an overdraft. I'm in a job in which you have to be constantly cautious. We need to streamline government work and to be careful about taxes too."
Oren: "We have a severe shortage of skilled labor. If the government were to assume the training of skilled labor and double productivity, we would double salaries. Enough with the pilots, stop talking, and act. I've received government grants to build a factory in Dimona, and I can't hire skilled labor."
Lapid: "We'll rehabilitate vocational training in Israel. That is our policy. We'll undertake a series of measures to bring skilled manpower to industry."
As for possible layoffs at Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) and other companies, Lapid said, "My job is, among other things, to keep workers in Israel. And if a company receives tax breaks, the government can later intervene in what it does. It's a two-way street."
Do you think that Teva received too many tax breaks?
Lapid: "The trapped profits law was not good. If tax breaks were given for years without anyone checking, it's not good. We're now instituting a process of examining all the tax breaks granted."
What is being done to change wage levels in the economy?
"The median wage is a figure that we cannot live with. More disposable income should be created, and one of the ways to do this is to push harder for innovative industries."
Do you really believe that the plan you've presented will lower housing prices?
"There's no other way. On this matter, we'll be aggressive and uncompromising. We've established a body that can work with every ministry and regulation, and change things. The housing crisis has become a strategic threat to the country and society. It may take some time, but we'll see many rental apartments coming on to the market. We'll change the situation."
Published by Globes [online], Israel business news - www.globes-online.com - on November 21, 2013
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