• The measures announced by
    the Minister of Finance are appropriate steps, and most of them integrate well
    into the government’s strategy to encourage employment, reduce poverty among
    working people, and assist young working families, and they are in line with
    the Bank of Israel’s policy recommendations. As they are measures that respond
    to structural problems, and are not coming to serve a transitory need to
    stimulate economic activity that is robust in any case, it is important that
    the measures be permanent and are not terminated after a year and a half.
  • At this stage, it is
    difficult to assess the precise cost of the measures announced, as some of them
    are not completely detailed, and they differ in the dates they go into effect,
    the period to which they apply, and the process required for their approval. In
    addition, it should be recalled that a final decision has not yet been reached
    with regard to the increase in the disability allowance, but it is expected to
    be significant.
  • Given these limitations, the cost assessments published by the Ministry
    of Finance are in line with the assessments of the Bank of Israel. The plan utilizes
    a significant portion of the reserve for special needs set aside in the 2018
    budget within the framework of the two-year budget. Assuming that all the
    measures are permanent (which is desirable, as noted), additional funding
    sources for the plan will need to be found, to ensure the ability to meet the
    fiscal targets for 2019–20.​ 
  • In addition to the plan
    presented, it is important that the government continue to take policy steps
    that will lead to improving the economy’s human and physical capital infrastructures,
    thus increasing the economy’s long-term growth potential. It is important that
    the government find budgetary sources for this purpose as well in the coming
    budgets, while meeting the moderate deficit-reduction framework set in law, so
    that the debt to GDP ratio will be able to continue declining moderately on a
    persistent basis, even when the transitory factors currently acting to reduce
    it dissipate.