Israel’s government, with its politicians, bureaucrats and monopolies, is incapable of providing quality services for its taxpaying citizens. This is the deep reason why education in Israel is at such a low level, why satisfaction from the police has bottomed out and why private health care is flourishing. And why you will pay much more than 70,000 NIS for your new car.
Israel’s citizens lose twice. We pay heavy taxes to fund the budget, but the government does not succeed in providing quality service in exchange.
We did a small experiment. We took Israel’s 2009 budget (the first year of the Netanyahu government in the 21st century). We increased it according to the rate of population growth and we linked it to the rate of salary increase in the economy. The result is that the 2018 budget should have been 19 billion shekels less than what it actually is. And this is a very stringent calculation. The actual savings could be much more.
What could we have done with this 19 billion shekels? We could have completely eliminated the tax for purchase of a new car or car parts – and we would have still come out with change. That means that a new Skoda Activa would have cost just 70 thousand shekels. In other words, every Israeli citizen would be able to drive a safer, more economic and technologically advanced vehicle.
Do you think that elimination of car-purchase tax doesn’t have to be our first priority? What do you think about cutting one third of the income tax for salaried workers in the ninth and tenth deciles – those people who today carry 90% of the income tax burden?
We can think of more possibilities. But the point is clear. Zehut promises to freeze Israel’s budget at its current level and to begin to significantly ease the tax burden on Israel’s citizens. After all, the budget increase of the past decade has not improved the quality of the services that the government provides, or our level of prosperity. On the contrary. The money that we net is being eaten away and we all lose.
So what will happen with education and health? Do we just have to accept the unsatisfactory level of service currently provided? Zehut believes that the way to a dramatic improvement in the level of education and other services is not to pour buckets of money into government monopolies. Instead, we have to change our approach and introduce competition and liberalization into the economy.
For example, Zehut wants to introduce the voucher method for schooling. Parents will receive schooling vouchers from the State and will redeem them in the school of their choice. The schools will compete to bring students to their institutions – otherwise, the school will not have an income. In other words, there will be competition between schools and like always, in a competitive market, quality will increase. Zehut is not inventing this method. The voucher method already exists in many European states.
The calculations were performed as per my request by economist Gilad Alper, who is the Zehut candidate for Finance Minister.
For more on Zehuts’s economic platform: https://www.zehutinternational.com/part-5-the-economic-plan-1
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