(Globes)."In the past decade, the Israeli economy has been growing rapidly. Our target should be to be among the top 15 countries in terms of GDP per capita within 15 years," said Prime Minister Benjamin Netanyahu at the second and final day of the "Globes" Israel Business Conference in Tel Aviv today. "This target is possible; it's not easy, but it's possible."
Netanyahu presented five basic rules for growth. The first, which he said many countries have forgotten, is to not allow government spending to exceed its income. "We've set rules that other countries are now forced to set, and we did it back in 2003," he said. "Keeping the fiscal framework is critical and cannot be avoided, just as a household or business cannot avoid it. This may be one of the strongest lessons of the recent decade. If you want more defense, education, and welfare, you have to cut something else. There's no free money."
Netanyahu's second rule is that "a growing economy is an economy in which you invest in - investors and workers." He asserts that it is necessary to cut the tax rate to a competitive level. "We must ensure profits as much as possible," he said. "one must ensure competitive tax rates. And therefore the aspiration is – as much as possible and whenever possible – to reduce tax rates. This issue has become part of the populist debate, and it has become part of all sorts of discussions I will expand on later. However, this is the rule, and it is gathering strength in the global economy, because people can move themselves or their money. So economies that provide better profits through lower tax rates attract more investors". He has promised to cut the company tax rate to 18% in 2016 from the current level of 26%. "We'll cut taxes and then we'll achieve the growth needed for the handicapped, the elderly, the Holocaust survivors, and the education system."
Netanyahu's third rule is to foster innovation, which Israel needs to achieve growth. "The added value comes from the renewed education system," adding that he intends to including economics in the primary school curriculum.
Netanyahu's fourth rule is to develop proper infrastructures, including water infrastructure. "Water consumption increases with the rise in GDP and population growth. We need more water and we'll get it. We also need expressways to the Negev and Galilee, a train to Eilat to link the Red Sea with the Mediterranean, and more." He also claimed that infrastructures could be a path to peace, through the construction of a Middle Eastern railway.
Netanyahu's fifth rule is to support the ability to conduct business witj minimal government intervention. "We must let the business sector function. The reform of the Israel Land Administration is derived from this."
"We see these rules in successful countries, and we see where the societies that have forgotten these rules are," Netanyahu said. "I look at Warren Buffett. He looks at simple and clear rules and what gives him the result is consistency in their application. Yes, Warren Buffett. The rules are ultimately very simple."
