|Netanyahu: Economic plan will help poor via interest rate cut |
The minister of finance told the British-Israel Chamber of Commerce: Israel's situation is critical.
Gal Nissim 27 Mar 03
"The support of Governor of the Bank of Israel David Klein, the capital market and the US loan guarantees are conditional credit for a limited period. We must therefore adhere to the economic plan," said Minister of Finance Benjamin Netanyahu last night, He was speaking before the British-Israel Chamber of Commerce conference at the David Intercontinental Hotel in Tel Aviv.
The economic plan proposes reducing the public sector, and a 20% cut, or NIS 7,000, in ministers' salaries, among other measures. Netanyahu said, 'The maximum public sector salary will be those of director generals. There is massive waste. The economic plan will eliminate extravagant salaries for top public sector officials.'
He added that ministers would cut their salaries to set a personal example. "It's very hard for me to promote the plan politically, but there is no choice. It's my duty; the economic plan must succeed. Israel's has the highest spending on government among Western countries," he said.
"We must cut spending to enable an interest rate cut. I agree with Klein that the interest rate cannot be cut so long as the deficit is growing. An interest cut will result from reducing the state's overdraft
"Israel's situation is critical. We're on the edge of the precipice, and we must stop the slide immediately. The economic plan must do three key things: reduce the tax burden; recruit investors; and encourage employment."
In response to allegations that the plan was hurting the poor, Netanyahu said countries that claim social equality, such as North Korea, actually have greater poverty. "High interest rates help the rich. They don't have overdrafts. The people who suffer are the poor, mortgage holders, and debtors. The economic plan, which aims at reducing the interest rate, will help the poor, among other things," said Netanyahu.
Published by Globes [online] - www.globes.co.il - on March 27, 2003