It appears that newly minted PM Benjamin Netanyahu will actually keep a campaign promise. Legislation will be introduced to privatize the Israel Lands Authority.

According to Globes: “The reform includes the transfer ownership of land from the ILA to the tenants who currently lease it under long-term leases for residences or business, and who will now assume full ownership. The terms for the transfer of ownership, including compensation, will be determined by the ministerial committee. If necessary, legislation will be prepared for this purpose. The marketing of new land will be solely for sale, not leases, even if there is no detailed plan for the land.

Under the reform, the ILA will cease to have any role in planning and developing infrastructures, and the responsibility will be transferred to local authorities and the private sector. Cases that require government involvement in planning and development will come under the responsibility of the Ministry of Housing and Construction, which will outsource the work.

The ILA will be replaced with a Land Authority, which will have a headquarters and three divisions. The business division will market land and carry out transactions, the land protection division will oversee and enforce the state’s land rights, and the service division will be responsible for current leases. The service division will outsource its work.”

Now let’s hope that the pledge to cut taxes will be implemented as well.

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The much anticipated economic plan of the new Netanyahu government was announced today, with tax cuts and privatization taking a leading role. While the plan calls for  promoting jobs and halting unemployment, the cornerstone of the plan is tax policy and structural reform.

Netanyahu laid down the gauntlet by saying that by lowering taxes, Israel will become of of the world’s most attractive investment destinations. As the rest of the world is marching towards socialism, Israel appears to be headed in the other direction, embracing free market principals that have led the world to unseen prosperity over the last 28 years.

According to Globes: “Netanyahu and Steinitz also announced decisions on the structure of tax cuts between 2009 and 2016, which focuses on the middle class. Netanyahu said, “The middle class bears the heaviest burden, and as a complementary measure, we’ll promote the abolishing of exemptions and improve collection. Excellent people are working there, but it’s no secret that the institution has been traumatized.”

Netanyahu’s tax plan calls for reducing the company tax rate to 18% by 2016 and reducing the maximum income tax rate for individuals to 39%.

Netanyahu added, “The individual tax rate will fall in 2010. We must distinguish ourselves from the world, so that everyone sees that we’re the most attractive. We’ll we’ll attract entrepreneurs and capital because the company tax will fall.”

Let’s see if once again Netanyahu’s policies can save the Israeli economy from the abyss, and be seen as a model worldwide, that lower taxes, privatization and individual land ownership are the cornerstones to real economic growth; and not by government printing presses working 24/7. to artificially stimulate the economy while bankrupting future generations.

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Could the Obama plan to regulate the VC industry in the US, provide a big boost to the Israeli VC industry? Sure could be the case. With Obama trying to regulate everything that has a smell of money, the VC industry could be in for trouble. That means opportunity for Israel. this means that the new Netanyahu government must cut taxes across the board and especially corporate taxes, that will help spur job growth and entrepreneurism.

Batya Feldman of Globes has an interesting interview with some local VC players. An an interview with Benchmark’s Michael Eisenberg: “Opposition to the rules being drafted is to be found in Israel as well. Michael Eisenberg, partner at VC firm Benchmark Capital, takes issue with the intention to impose the regulations on the world of venture capital.

“Geithner spoke of the need for regulation of anything that could become a substantial threat to the economy,” he says, “and I don’t see how a venture capital fund could represent a threat to the entire financial system. But we can relax. Regulation will apply to venture capital finds that will be put together in the future, so no problems are expected for funds that have already raised capital.”

How far will the new rules affect Israel’s high-tech industry?

“It’s hard to know what the regulation will consist of. If there’s a requirement to report on every investment, that will be impossible. However, for Israel this is in fact a once in a lifetime opportunity, one that could make it a world financial center. If they impose restrictions on the funds in the US, in Israel we should give incentives, loans and insurance that will encourage funds to register in Israel. That way we won’t be the carriage but the locomotive.

We here about the demise of the Israeli VC industry. Maybe Israel can capitalize on Obama’s mistake and not only save the VC industry, but have it both flourish here and attract foreign funds as well.

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C’mon now Bibi. Don’t get cold feet. In a press briefing the newly crowned PM said that taxes may be slashed but not neccessarily this year.

According to Globes:”Netanyahu and Steinitz were asked whether tax rates would fall this year. Netanyahu declined to commit, saying, “You’ll hear about tax reform this year, but that doesn’t mean that taxes will fall this year.” Netanyahu stressed the importance of adopting a “strategy of a small country”, which he said could make rapid changes. He supported the idea of tax cuts, but refused to commit to a timetable.”

Let’s get those tax cuts now, so we can jump start the economy.

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