Kahlon Lashes Netanyahu on Salary Cap

Minister of Finance Moshe Kahlon lashed out at Israeli Prime Minister Binyamin Netanyahu on Tuesday, charging that Netanyahu’s opposition to the proposed cap on executive salaries breaks a coalition pledge to promote Kahlon’s reform program.

Netanyahu not only came out against the income limit in the financial sector — 35 times the salary of the lowest-paid employee in the company — he is even mulling a raise in the ceiling above which salaries are not recognized as expenses, from gross NIS 2.5 million to gross NIS 3.5 million.

Kahlon’s ire was fueled by the way he found out about the prime minister’s position, reading about it in the newspapers:

“If there’s a change in the coalition agreements, I’d like to know about it… I think he should call me on the phone and tell me, ‘My dear minister of finance, I have decided to violate the agreement.’ I take this seriously, because all agreements should be honored. This took me by surprise, because I have a signed agreement with the prime minister. One of my conditions for entering the government was that he wouldn’t interfere with my reforms. He signed an agreement stating that he would promote them.”

A bill to impose the new maximum on top-tier incomes was approved by the Knesset Finance Committee last week by a unanimous vote, but it still must be voted on by the plenum.

Speaking at a conference sponsored by Calcalist, Kahlon also commented on other developments in the economy. Regarding the real estate market: “We have put an end to land speculation in Israel. We have committed ourselves to marketing 70,000 apartments, and we’ll meet that commitment. When the country stops using land prices to make a profit at its children’s expense, it will come out ahead.”

He mentioned the capital market reform he was leading — the establishment of another independent authority, saying, “A year from now, there will be an independent authority.”

On the Strum Committee for strengthening competition in banking, he noted that the committee was scheduled to present its final report at the end of the month. “I’m telling you that the Strum Committee will publish its conclusions at the end of March. We’ll bring it to the cabinet, and we’ll also confer with the governor of the Bank of Israel about it. We’ll see what can be done to keep the lamb whole and the wolf happy.”