"When the price committee suggested that I raise the cost of subsidized bread by 6%, I met with them but didn't agree to raise it by even 1%. Because who is it that buys subsidized bread? People that don't have money. So we found solutions and didn't raise the cost of subsidized bread," former Economy Minister MK Eli Cohen (Likud), tells Israel Hayom.
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Cohen, who also served in the government of Benjamin Netanyahu as Minister of Intelligence, seeks to become finance minister after the next elections, should Likud manage to return to power.
"I'm talking first and foremost about compassion," he continues. "When I look at the present government, what I see is a government that is aloof. I know there are families whose salaries haven't risen by 26% as the price of fuel has, they haven't risen by 14% in line with food prices, and they haven't risen in line with the cost of electricity, or the cost of housing. So we see this government as being aloof."
Cohen says the increase in bread prices is scandalous. "It is the state that has raised the prices of several of the ingredients. "We have 45 billion shekels in the state coffers. Why aren't all duties on coal being cut so that there is no increase at all in the price of electricity? Why aren't grants being given to local authorities instead of increasing municipal tax rates and rates for businesses, and the same with water rates? If we were facing a deficit, and wide-scale unemployment, then we would understand, but in the current situation there simply is no explanation.
"At a time when there is a surplus, citizens wake up every morning to new decrees and new price rises. This is not reasonable. The price hikes are for the most part on basic goods and services – electricity, water, municipal rates, cooking gas, medications - things the state is directly connected to. The state tells businesses not to raise prices, but on the other hand, it is a catalyst for price rises.
Q: The inflation that you are talking about is something that is happening throughout the world and it has to be noted that inflation in Israel is half of that in Europe and the United States. The cost of fuel hasn't gone up either because of the steps taken by the government, and neither has the cost of electricity or bread. As a former Minister of the Economy, what would you advise the government to do?
"I would advise the government to use the 45 billion shekel surplus that has accrued in the state coffers since the beginning of the year, to cut taxes and duties on basic goods. That is the first thing I would do. I would prevent price increases for basic goods. For example, I would cut VAT."
Q: Talking about cutting taxes sounds a lot like election sloganeering.
"Not at all, I'm simply suggesting to check that option out: The Bennett government which spoke about the Singapore Plan has increased taxes. We, without any sloganeering, did not raise any taxes; it can be done. We will encourage competition, cut taxes, and show compassion."
Q: Israel has debts of one trillion shekels.
"The debt to GDP ratio of the State of Israel is under 70 percent; that is one of the best ratios in the OECD. That is the result of the strong economy that we left behind and therefore tax cuts will stimulate the economy."
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"We see that the government is managing an economy in retrospect: There a price rises -- they hold an emergency debate. Yair Lapid asked some time ago, 'Where's the money?' But today, the middle classes in Israel are humiliated. The purchasing power of the middle classes… has dropped the most. In which country in the world have house prices gone up by 16 percent in a year.?"
Q: But during the Netanyahu years, house prices almost doubled.
"The past year saw the sharpest increase in house prices over the past 15 years. And in the past year, we have seen prices increase by more than in the past five years. Moreover, we marketed 140,000 apartments, while the amount the Bennett government marketed was very low."
Q: So where are the solutions you are proposing to bring house prices down?
"The housing crisis is not a matter of fate, it can be solved. I have a housing program that talks about increasing supply, breaking the monopoly of the Israel Lands Administration, privatizing the marketing mechanism, building apartments for rent on Moshavim for 2,000 shekels a month, and building public housing. If I become finance minister, I will make sure that there is a five-year plan with a long-term strategy."
