At its special meeting in Safed, the Cabinet approved the Trajtenberg Committee’s taxation provisions.

 Weekly Cabinet meeting held in Safed


Cabinet meeting in Safed (Photo: GPO)

(Communicated by the Prime Minister’s Media Adviser)

Following are Prime Minister Benjamin Netanyahu’s remarks at the start of the weekly Cabinet meeting today (Sunday), 30 October 2011, in Safed:

"I told you earlier, at the opening ceremony for the Faculty of Medicine, that an elderly resident of Safed, aged 102, is in my home. He told me about his youth in Safed, at the age of 10, when he arrived here 91 years ago. I went to Rosh Pina and checked the diaries of my grandfather, who was then a school principal, and I discovered, he wasn’t so old then, but what was an issue then was more money for education.

We know that there is nothing new under the sun but there is much that is new because things change. I am pleased that we have reached this day. This is a special day for the citizens of the State of Israel, for the residents of the Galilee, for the residents of Safed. The last time a medical school was opened in Israel was 37 years ago in 1974. This is a great change and I think that it expresses a trend of renewal, a closing of gaps and a jump forward for the Galilee, for medicine and for the State.

I think that this is a special and blessed day. I do not think that it happened by coincidence. This government is a government that gets things done. The idea to establish a medical school rolled around for years; previous governments even made decisions on the issue. There is a difference between a decision, or between a vision, and action.

When I met the Friends of the Faculty of Medicine in the Galilee in a café near my home, back when I was Leader of the Opposition, they told me: ‘Sir, commit yourself please, that if you are elected Prime Minister again, that you will act to establish a faculty of medicine in the Galilee.’ I told them: ‘I commit myself.’ In order to turn the vision into reality, I asked them: ‘What is the problem?  Nobody shares this vision?’ They responded: ‘There are partners, they all share in the vision, but they are all divided on how to realize it.’ There were arguments over where it should be located. There were arguments over money. There were arguments over the bureaucratic procedures.

The government has acted with determination in order to resolve these problems. We decided on a place. We determined a procedure to choose the institution. We decided that we would transfer the money and we transferred it. We determined a procedure to bypass the bureaucracy by turning the project into a national project. All of this enabled the faculty to be established. Otherwise, we might have remained with a vision for another 20 or 37 years.

This is great news and a great privilege for the entire government as well as for all of the relevant ministers. I thank Silvan, for the great effort that he made in many areas on this issue. I thank Gideon; we had to cut through a lot of bureaucracy on this issue, in your field as well. I thank Deputy Minister Litzman. I thank Yaakov Neeman. I thank Bar-Ilan University. I thank you, Manuel, and your colleagues, for this work. I thank Aharon Valensi; he also helped on this matter. I thank Yuval Steinitz; this would not have moved without the Finance Minister and it moved with the Finance Minister. I thank Professor Moshe Kaveh and the whole Bar-Ilan team because you joined in on the other side of the equation, to bring money, yours, which was and will yet be, very much.

I think that this is a festive day for the Galilee. Why? Because we are bringing in a major anchor here. Not just for medicine in the Galilee and in Israel but because we are also providing here an anchor for industry, for the industry of tomorrow in the life sciences, in medicine, in treating autism, in all kinds of other research that will come, for the colleges and for the workforce. The creativity here will go forth from here to overseas.

There is a great anchor here for the industry of knowledge. I do not want to say Tuscany in the Galilee; I want to say Galilee in the Galilee. This is marvelous. This is a marvelous and magical stretch of country that each one of us is bound to and we will develop it. I would like to say that the Government is systematically acting in this direction, to develop the Galilee and the Negev.

I cite the decisions led by Deputy Minister Gila Gamliel to provide a year’s free tuition to discharged soldiers in the periphery and by Deputy Minister Litzman to bring MRI machines to the periphery. We decided to pave highways to the periphery; this is, perhaps, the greatest revolution of all. We are investing NIS 27 billion in expressways and railways, and this will, first and foremost, link up with the periphery, will cancel it. For the first time since the establishment of the state, we are leaving the Hadera-to-Gadera corridor.

We are building hospitals in the north and in the south. We are moving the IDF to the Negev. We are building a Faculty of Medicine in the Galilee. These are great changes that the Government is enacting. This is not words, not statements, not declarations of vision or intent. This is action; this is realizing the idea of opening up the country. The country is not that large but it is closed in, it is a bottleneck in the narrow coastal corridor, with a small enclave of Jerusalem.

We will continue, also during the Knesset winter session, to set records for action. We are doing this with all ministries and all ministers together, working together in a good spirit, and also including all of the mayors here and all of the friends from the Galilee and from beyond the Galilee. There is a great integration here of action by the Government, the universities, the private sector, the municipalities and the citizens of Israel.

We are on an upward path. I would like to thank you all for this meeting. I will report to my father that approximately 90 years after his father asked for a bigger budget from the Baron’s officials, for education in Safed, that we have brought more budgets for education, for medicine, for the universities, for Safed and for the Galilee. We are pleased that the Galilee is developing and that Safed, that ancient city, is embracing a new and promising future.

I would like to add a word, not about the north but about the south. I very much esteem the fortitude of the residents of the south and I promise here that the other side will pay prices that are far higher than those that it has paid up until now, until it stops firing. There is no ceasefire. The IDF will defend the residents of the south and will eliminate those who launch missiles."

The Cabinet this evening (Sunday), 30 October 2011, at its special meeting in Safed, approved the Trajtenberg Committee’s taxation provisions, including the following points:

* Cancellation of the excise on fuels. The benefit is worth NIS 2.5 billion and will result in a savings of NIS 0.40 on each liter of gasoline, NIS 0.20 on each liter of diesel fuel (very relevant for public transportation) and NIS 34 per ton of coal (which affects the price of electricity).

* Two tax credits will be given to men for each child under 3, resulting in a significant NIS 418 monthly supplement or NIS 5,000 per annum. (This is in addition, of course, to the tax credits that mothers receive for each child under 18. As of 1 January 2012, mothers will receive an additional tax credit for children under 5.)

* Surtax of 2% on those whose income – from whatever source – is over NIS 1 million per annum.

* The comprehensive cancellation of import duties on products not produced locally.

* Purchase taxes on competitive sectors (such as electronic goods) will be lowered.

* Capital gains tax will be raised from 20% to 25% (and for controlling shareholders from 25% to 30%).

* Company tax will rise from 24% to 25%.

The outlined changes in income tax and company tax will be reconsidered by 2014. The benefits will enter into force on 1 December 2012, following Knesset approval.

Prime Minister Netanyahu said, "The consumer will feel in his pocket today’s Cabinet decision. We will continue to act with budgetary responsibility in order to avoid the global economic upheaval." Prof. Manuel Trajtenberg added, "This is a substantial change in the Israeli taxation system."

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1. Negev and Galilee Development Minister Silvan Shalom, Education Minister Gideon Saar, Bar-Ilan University President Prof. Moshe Kaveh and the Director of the Council on Higher Education Planning and Budget Committee (hereinafter "the Council") briefed ministers on the stages that led to the advancement and opening of the Faculty of Medicine in Safed and its socio-economic significance for the Galilee. Minister Saar and the Council Director also discussed the beginning of the academic year at institutions of higher education throughout Israel, as well as the reforms being carried out in the sector.

2. The Cabinet discussed the development and preservation of the Old City of Safed. It was decided to establish an inter-ministerial steering committee and allocate NIS 1 million to this end.

3. The Cabinet also discussed the planning, preservation and development of the "Beit Hakahal" center for the heritage of the Old City of Safed and decided – inter alia – to allocate NIS 4 million to this end.

4. On enshrining the memory of the late Rechavam Zeevy, the Cabinet decided to act to complete the rehabilitation and operation of the historic khan at Sha’ar Hagai, and establish there a visitor’s center dedicated to his memory.

5. The Cabinet decided to rename the Ministerial Interior Committee as the Ministerial Interior, Services and Local Authorities Committee.

6. The Cabinet decided to adopt an experimental pilot plan to strengthen local councils in the periphery.

7. Pursuant to both the Zionist vision of building up the Negev and the Government’s policies to develop, advance – and attract populations to – the Negev, and increase the supply of housing in the periphery, the Cabinet decided to initiate the establishment of a bloc of rural communities in the area west of Arad.  Click here for further details.

8. The Cabinet voted to amend the tax codes.