Israel suffers from a severe public transport infrastructure deficit, according to the OECD's biennial Economic Survey of Israel published today. The OECD says that this public transport deficit causes congestion, air pollution, poor access to place of employment, especially for disadvantaged groups living in peripheral regions. The report says, "Better infrastructure in disadvantaged areas, especially Arab cities, would improve job prospects and well-being."
The OECD report calls on the Israeli government to increase its investment in infrastructures and education in the Arab and Ultra-Orthodox Jewish sectors and bring about vital structural changes in those two areas.
The report also calls on the Israeli government to exempt fresh fruit and vegetables and other items from VAT. It also suggests that the government put higher taxation on cars and make wider use of tolls and charges in order to encourage people to use public transport. The report also proposes more competition in the aviation sector by breaking the monopoly of the Israel Airports Authority.
The OECD report is also critical of the government's housing policy and says that the number of new homes being built is not sufficient to meet demand and bring down prices and that municipal taxes for homes are too low to finance the required development.
These problems aside, the report says that Israel's economy continues to register remarkable macroeconomic and fiscal performance and that, "Israelis remain on average more satisfied with their lives than residents of most other OECD countries."
Published by Globes [online], Israel business news - www.globes-online.com - on March 11, 2018
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