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April 27, 2017 9:21 am

Infighting Between Israel’s Netanyahu and Finance Minister Kahlon May Be Precursor to Early Knesset Elections

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Israeli Finance Minister Moshe Kahlon (left) and Prime Minister Benjamin Netanyahu, April 3, 2017. Photo: Hadas Parush / Flash90. – Infighting between Israeli Prime Minister Benjamin Netanyahu and the country’s finance minister over tax reforms may be the precursor to early government elections.

The prime minister was reportedly blindsided by Moshe Kahlon’s unexpected announcement last week of his “Net Plan” — a series of reforms aimed at assisting the middle class that take advantage of the government’s budget surplus — and the pubic spat has jumpstarted speculation that Kahlon’s independent press conference may have been an attempt to score political points in advance of elections.

Since Kahlon’s announcement, polls have been gauging the Israeli public’s readiness to replace the current government and the country’s second-longest serving prime minister.

“My impression is that this was perceived as a bold act on the part of Kahlon,” said Gilad Brand, a researcher at the Taub Center for Social Policy Studies in Israel.

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Results from a survey, presented Saturday on Channel 2, revealed that only 33 percent of Israelis are satisfied with Netanyahu’s performance, while also demonstrating that Likud would likely take a minor hit if new elections were held today, losing just two if its 30 Knesset seats. The poll also showed that the Yesh Atid party — led by former television anchor Yair Lapid, who served as finance minister in Netanyahu’s previous governing coalition — would gains 14 seats, for a total of 25, though those wins would come predominantly come at the expense of parties other than the Likud, including Kahlon’s Kulanu party.

Another poll — conducted this month by the Israel Democracy Institute (IDI) and Tel Aviv University (TAU) — found that 70 percent of Israelis would support a right-wing or center-right government in new elections, seemingly mirroring the makeup of Israel’s current government. By contrast, only 24 percent would prefer a center-left or left-wing government. Additionally, 81 percent of Jewish respondents said that regardless of their personal preferences, they believe a right-wing or center-right government stands the best chance of being elected, while 8 percent say a left-wing or center-left government could win.

Tamar Hermann, a professor of political science at Israel’s Open University and a senior fellow at the IDI, told that the polls haver confirmed researchers’ suspicions  that “even if the public is not crazy about the government’s every move, in general the current government represents the direction desired by the overall majority of the public.”

Indeed, though members of Netanyahu’s government may be at odds with one another — with disagreements increasingly playing out in public and stoking threats of early elections — coalition members may be forced to recognize that their strongest position is the status quo.

The reforms announcement came just weeks after Netanyahu publicly strong-armed Kahlon into accepting a compromise on launching a new public broadcaster, a contentious issue for the two leaders that temporarily threatened to break apart Netanyahu’s center-right governing coalition.

Best use of the tax surplus?

While both Kahlon and Netanyahu are generally proponents of lowering taxes, using a temporary surplus in tax revenue to implement a tax policy that is intended to be ongoing “raises major concerns,” Taub researcher, Brand told

“If the policymakers are interested in redistributing resources, they should allocate a permanent budgetary source for this,” he said.

Further, Brand said, “economic theory and historic experience has taught us that at such times, government should accumulate resources that will be pumped back into the economy in times of a recession.”

However, if the government was intent on utilizing the funds, rather than passing the surplus back to the public, “it may have been a smarter move to use the funds in order to decrease the national debt,” he added.

Yet balancing the budget, even if fiscally sound, would be unlikely to garner praise from a population that continuously struggles with Israel’s high cost of living. According to Brand, the Net Plan targets “Kahlon’s potential constituency: low-income working families with young children.”

Member of Knesset Yoav Kisch, who is part of Netanyahu’s Likud party and chairs the Joint Committee for the Knesset Budget, cautioned during an interview on Army Radio that regardless of public support for the Net Plan, “without the support of the prime minister and Likud, the plan cannot get the go-ahead.”

“Some of the steps require legislation and Kahlon may be forced to make changes in his plan in order to push it through, so the final result is yet to be seen,” Brand said.

Meanwhile, Netanyahu has not offered any immediate public endorsement for the Net Plan, though sources close to the prime minister expressed careful support, stating that the plan “was in the right direction and will be approached positively.”

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