Israel’s Budget Plan: Boost AI, Convert Offices to Homes, Promote Weed Exports
Israel’s budget for 2021-2022 includes a series of proposed structural changes and reforms, including a program to boost artificial intelligence-based technologies and permission for commercial real estate developers to convert office space into residential units , the details of which were released Wednesday evening by the Ministry of Finance.
Before the approval of the national budget, the finance ministry presented Prime Minister Naftali Bennett with the main structural changes it hopes to bring about as part of its economic plan for Israel for this year and next.
It will be the first budget since its approval for 2019, which was followed by two years of political deadlock.
The program is based on three main principles: promoting employment and investing in human capital through training and integration of marginalized populations into the labor market; stimulate transport, housing, energy and technology infrastructure; and create the conditions to support growth in the private and public sectors by reducing regulation, strengthening competitiveness, improving public services and streamlining government operations.
The proposed plan is part of the Arrangements Act to be submitted with the budget. Finance Minister Avigdor Liberman recently told a conference that he plans to pass the budget by November.
Among the proposals:
Lower it Cost of life facilitating imports by accepting international product standards, without the need for additional approvals locally, and allowing multiple parties to import products in parallel.
Increase competition in the banking sector passing a law requiring financial entities to transfer information about their customers, with their approval, to technology companies that can provide those customers with information about the financial services they consume, exactly how much they pay for them and how much they could save if they switch to another financial service provider. This will help strengthen the position of clients vis-à-vis financial entities, promote the entry into the market of high-tech financial entities (fintech companies), increase competition in the banking system and reduce spending by households and small businesses in the banking system.
Go planning employment goals for the economy by 2030, and reform and implement new vocational training programs to ensure that workers meet the demand for labor.
Convert offices to residential units: Israel has tens of millions of square meters set aside for office and commercial space that will not be needed for decades to come, the ministry said. Faced with the need to increase the supply of housing and rationalize the use of land, the ministry proposes to convert up to 50% of office spaces, those located near residential areas, into “micro-unit” apartments. “, Which will add thousands of residential units to the housing supply, according to the press release.
Establish a national program for promote the high tech industry. The plan includes the approval of a national artificial intelligence program, to stimulate the development of technologies in the sector; remove bureaucracy to encourage mergers and acquisitions and stimulate investment; improving taxation; attract talent from abroad to Israel; stimulate the integration of Arabs in the technology sector; and allow technology companies to try their products locally.
Reduce regulation. Prime Minister Naftali Bennett, Finance Minister Avigdor Liberman and Justice Minister Gideon Saar on Tuesday launched a national plan to cut regulation and red tape. The aim of the program is to enforce “smart regulation” and remove unnecessary and cumbersome rules in order to help the economy emerge from its coronavirus crisis.
Promote the export of medical cannabis: Israel has a “significant advantage” over competing countries in research and development, knowledge and regulation in the field of medical cannabis. All of this can help make Israel a world leader in the field. Yet the potential of the sector has yet to be realized, and the idea is to remove existing barriers to medical exports and thus allow cannabis producers to expand and diversify their export options.
Increase the transparency of defense budget, through greater oversight of salaries and pension payments and a team to oversee acquisition strategies, among other steps.
The health system: lower regulations, strengthen the public health system by leveling the playing field with the private health sector; and stabilize hospital finances by changing the way they are budgeted and setting fines for deficits.
Reform the education system, by transferring decision-making powers, curricula and budgets from central government to school principals who have a proven track record of success.
Encourage the transition to clean energy by stimulating the production of green electricity, switching to electric transport and increasing investment in green infrastructure projects, including the construction of solar installations, freeing up land for renewable energy projects and strengthening nationwide storage facilities.
Public transport: Remove restrictions to allow private entities, especially employers and municipalities, to set up private transport systems; facilitate the use of carpooling solutions as an alternative to car ownership; increase law enforcement; provide citizens with an annual report on public transport based on indices set up by the Ministry of Transport; and set up joint public-private partnerships for the development of parking spaces outside urban areas.
The proposals also support a NIS 150 billion ($ 46 billion) metro project in the Dan region, which will result in annual savings of NIS 26 to 34 billion and create 125,000 new jobs, the ministry said.
Other proposals made by the Ministry of Finance include: the promotion of government digitization and offer more digital services to citizens; improving the prison system; creation competition for postal services; adapt fire regulations to the standards of the Western world; and streamline the legal system.