Netanyahu floats scrapping VAT on basic goods as election positioning intensifies

The Knesset yesterday confirmed its own dissolution in preparation for a 17 March election. Almost immediately, Prime Minister Benjamin Netanyahu appeared to make an election pitch by suggesting that he would scrap VAT on basic foodstuffs.

Speaking at a major business conference in Tel Aviv, Netanyahu proposed exempting basic food products from 18 per cent VAT, which are now subject to price control. He said, “This is a benefit that will reach millions of people. It addresses people’s most basic needs – bread, milk, eggs.” Netanyahu was keen to stress that such a policy would be of greater financial benefit to more people than Yesh Atid leader Yair Lapid’s flagship policy to scrap VAT for many first-time homebuyers. However, Lapid accused Netanyahu of treating Israeli voters like 4-year-olds, saying, “Every election, he promises them sweets he won’t deliver, while saying there are enemies all around and only he can save us.”

Meanwhile, Channel Two reported yesterday that Netanyahu reassured Defence Minister Moshe Ya’alon that he would remain in post if he wins the 17 Match poll. Ya’alon apparently asked for clarification following rumours that Netanyahu would give the portfolio to Jewish Home leader Naftali Bennett.

Also yesterday, Labour faction Chairman Eitan Cabel fuelled rumours that Labour and Tzipi Livni’s Hatnuah are inching towards a joint electoral list, by saying that such a bloc would run under a new name. A Maariv poll indicates that a joint Labour-Hatnuah list could be the largest Knesset faction. Reports suggest that Kadima leader and former-Defence Minister Shaul Mofaz will also join the bloc. However, Livni is reported to be taking her time on any decision with an alliance with Yesh Atid still thought to be a possibility.

Shas leader Aryeh Deri yesterday played down rumours of a split with senior leader Eli Yishai. Deri told a meeting of party’s Knesset faction, “Gentlemen, we are all united.” He is thought to have offered Yishai second place on the Shas list of candidates.

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