section_path: Minister of Finance (2003–2005)
section_name: Minister of Finance (2003–2005)
paragraph_text: Minister of Finance (2003–2005)
  
  After the 2003 Israeli legislative election, in what many observers regarded as a surprise move, Sharon offered the Foreign Ministry to Silvan Shalom and offered Netanyahu the Finance Ministry. Some pundits speculated that Sharon made the move because he deemed Netanyahu a political threat given his demonstrated effectiveness as foreign minister, and that by placing him in the Finance Ministry during a time of economic uncertainty, he could diminish Netanyahu's popularity. Netanyahu accepted the new appointment. Sharon and Netanyahu came to an agreement that Netanyahu would have complete freedom as finance minister and have Sharon back all of his reforms, in exchange for Netanyahu's silence over Sharon's management of Israel's military and foreign affairs.
  
  As finance minister, Netanyahu undertook an economic plan in order to restore Israel's economy from its low point during the Second Intifada. Netanyahu claimed that a bloated public sector and excessive regulations were largely responsible for stifling economic growth. His plan involved a move toward more liberalized markets, although it was not without its critics. He instituted a program to end welfare dependency by requiring people to apply for jobs or training, reduced the size of the public sector, froze government spending for three years, and capped the budget deficit at 1%. The taxation system was streamlined and taxes were cut, with the top individual tax rate reduced from 64% to 44% and the corporate tax rate from 36% to 18%. A host of state assets worth billions of dollars were privatized, including banks, oil refineries, the El Al national airline, and Zim Integrated Shipping Services. The retirement ages for both men and women were raised, and currency exchange laws were further liberalized. Commercial banks were forced to spin off their long-term savings. In addition, Netanyahu attacked monopolies and cartels to increase competition. As the Israeli economy started booming and unemployment fell significantly, Netanyahu was widely credited by commentators as having performed an 'economic miracle' by the end of his tenure.
  
  However, opponents in the Labor party (and even a few within his own Likud) viewed Netanyahu's policies as "Thatcherite" attacks on the venerated Israeli social safety net. Ultimately, unemployment declined while economic growth soared, the debt-to-GDP ratio dropped to one of the lowest in the world, and foreign investment reached record highs.
  
  Netanyahu threatened to resign from office in 2004 unless the Gaza pullout plan was put to a referendum. He later modified the ultimatum and voted for the program in the Knesset, indicating immediately thereafter that he would resign unless a referendum was held within 14 days. He submitted his resignation letter on 7 August 2005, shortly before the Israeli cabinet voted 17 to 5 to approve the initial phase of withdrawal from Gaza.