This is the time for social justice, as Saturday night's protest has taught us.
Israel's economy, of which every one of us is a part, is in the throes of change that is important, necessary and just. The Israeli economy has experienced great successes in recent years. Remarkably, it withstood the financial crisis that affected the United States three years ago and, even more remarkably, it is withstanding the current wave of bankruptcies affecting countries including Greece, Spain and Portugal. Unemployment is down to 5.5 percent, and that figure represents about 150,000 Israelis who went from being unemployed to becoming part of the workforce. This is not simply another statistic -- this is a sign of social success.
So why are so many Israelis so angry? Because they have come to realize that along with these successes, our economy also has some shortcomings. Indirect taxes have skyrocketed, and the economy, which 20 years ago was dominated by government monopolies, has changed hands and is now run by private companies that concentrate wealth and hinder competition. The cost of living has become unbearable.
The public outrage over these faults, expressed in Saturday's demonstration, erupted recently and is expressed at times with greater or lesser intensity. For now, we'll set aside the number of demonstrators and focus instead on the economic changes the protest leaders are demanding.
I proposed a plan at the Knesset Economic Affairs Committee whose main goal is to lower indirect taxes, particularly the excise tax on gasoline. I also called for reducing tariffs on imported goods -- which have created a chain reaction of increasingly high prices across all sectors of the economy -- and canceling the VAT (value added tax) on basic goods, including water, bread and milk.
In addition, I suggested increasing corporate taxes from the current 24% to 26%, and making changes to income tax brackets so that the wealthy pay more.
However, some of the protest leaders are not satisfied with reducing taxes, lowering the VAT and selling off land, which has already led to lower real estate prices.
They need to understand that the call for changing the national budget and increasing direct taxes is the absolute opposite of social justice. Why? Because breaking the budget would lead to the immediate downgrading of Israel's economic ranking and the withdrawal of foreign investments.
Is this good or bad for the Israeli economy? Would this increase competition or weaken it? Is this social sensitivity or an attempt to return to an economy that is more concentrated and less competitive?
What the Israeli economy currently needs is balance. We cannot follow the teachings of American economist Milton Friedman, who advocated a complete lack of government involvement in the economy. And we certainly won't return to the Soviet economic model, which was controlled completely by the government and was the least social and just.
There is a middle path between these two approaches: Social sensitivity coupled with a free economy. However, above all, what is required now is national responsibility, so that we don't reach a position none of us wants to be in.
The writer is deputy Knesset speaker and former chairman of the Knesset Economic Affairs Committee.