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Thoroughly modern minister Naftali Bennett looks east for Israel’s future

Naftali Bennett views Australia as 'the most pleasant place with which I've ever interacted'....

Naftali Bennett views Australia as 'the most pleasant place with which I've ever interacted'. Picture: Nikki Shorti Source: News Limited

ORIGINALLY cast as a conservative, Naftali Bennett, Israel's young Minister for the Economy, is discarding or destroying shibboleths in a way the country's establishment finds disconcerting but voters love.

He is eagerly "going east" in search of new trade and investment partners instead of focusing on the country's older European and US business roots.

It is in that role that he has been travelling in Australia after visiting Indonesia, the world's most populous Muslim country. His first two overseas visits were to China and India.

He is also pushing two new groups to participate for the first time in Israel's economy in a significant way: Arab women and the ultra-Orthodox.

Now aged 41, he was born in Israel and, like a succession of political leaders, including Prime Minister Benjamin Netanyahu and Ehud Barak, he served in the elite Sayeret Matkal commando unit.

When he was 26, he left the military and co-founded Cyota, an anti-fraud software company that was sold eight years ago for $145 million.

He says: "When you log online to your bank, our software makes sure who you are," with 70 per cent of Western bank transactions incorporating Cyota.

"As a result, I ought really be in the Caribbean with a cocktail in my hand," he says. "But destiny wanted it differently."

He had remained a major in the military reserves and was called back to participate in the second Lebanese war on a "search and destroy" mission behind enemy lines against missile launchers.

"That changed everything, it pulled me back from the hi-tech entrepreneurship that I loved."

His generation had never before experienced "an existential threat", he says: "We sang peace songs in kinder."

But that confrontation with Lebanon caused a convulsion in his thinking, combined with his home situation; he had married and had a child.

He started to ask himself: "Whatever do they want from us?" Then he began to realise, he says, that "the Hezbollah guys didn't want anything, whatever we do, they don't want us in Israel. We had conditioned ourselves, though, that if we wanted something enough it would happen." In 2006 he applied his hands-on style to politics, becoming Netanyahu's chief of staff; then, after a further foray as chief executive of another software pioneer, Soluto, which was sold recently for $130m, he decided to go into politics on his own account.

He took over the leadership of a party, Habayit Hayehudi (Jewish Home), that had existed for 11 years and was known as a religious organisation. He gave it an indicative new slogan: "Something new is beginning."

In its heyday, decades ago, the party had captured 12 seats in the Knesset, the parliament, but this had dwindled to three in the previous parliament.

Bennett had not been a member but competed "out of nowhere" in primary elections and was chosen as leader. He says his message was: "We don't need a religious party any more. We need to open it up to secular Israelis, we need to restore Jewish identity and strengthen our power in the region. And it worked."

The party attracted a 40 per cent non-religious membership at the election early this year and won 12 seats in the Knesset.

He formed what he calls "a surprising alliance" with another fresh face in Israel's political scene, secular former journalist Yair Lapid, whose new party Yesh Atid (There's a Future) won 19 seats, the second biggest total, delivering him the Finance Ministry.

This started, he says, as a tactical arrangement "and morphed into something more profound".

He says "70 per cent of Israelis agree on 70 per cent of issues", but politicians traditionally obsess about the 30 per cent. Instead, Bennett wants to focus on areas of consensus, including some that "have plagued us for decades".

One such area is "to get the ultra-religious into society, to work and to serve (in the country's defence)". Today, he says, 32 per cent of first-grade pupils at primary schools are ultra-religious.

"That's fine, as long as (the ultra-religious are) willing to work and serve. I've proposed a carrot-and-stick approach, providing a five-year plan to train them."

In the past many have lacked education in Israel's core curriculums, including maths and English. That is changing. "And we are providing incentives to employers to hire them, initially, and providing vocational training." Lapid was more focused on getting them to do military service, while Bennett concentrated on employment.

"We need to do the smart thing at first, not the 'right' thing," Bennett says. "If they work with us, their children will serve with us. I'm willing to be patient and don't want to create resistance."

Another area of priority is to increase the proportion of Arab women in the workforce from the present 27 per cent to about 60 per cent. This involves effort in training, transportation and cultural issues. The Arab men who are Israelis, he says, almost have full employment, in contrast.

He says: "The Russian migrants were the steroids that carried us for almost 20 years, and this is the new wave" - the ultra-religious and Arab women joining the workforce.

There is a degree of prejudice that needs confronting first, he admits, "especially against the Orthodox". But he is confident of "breaking those glass walls".

Bennett also has championed a balanced budget, of $14.5 billion this year. "That was highly unpopular and wholly good."

The government is starting to create competition in monopoly areas, he says, such as the ports, "which were union run".

"The economy is going through huge change. It is just bustling with start-ups, but my thrust is not to call Israel a start-up nation but a lighthouse nation."

The strengths Israel needs to promote, he says, are in technologies around water, agriculture, alternative energy, cyber security and medical devices. "We can do good in these around the world."

In India alone, for instance, Israel has developed a dozen model farms to increase food productivity, where 20,000 farmers are trained every year. On one, two hours' drive from New Delhi, the production of cucumbers has increased from 1kg per square metre a year to 10kg, Bennett says. "We are good at this because we don't have water and we don't have much land."

Israel's ingenuity, its reforms and technologies have pushed its economy along, he says, and this is being reinforced by the discovery of offshore gas, which Woodside is likely to be involved in exploiting.

To leverage Israel's potential, he says, it's necessary to engage more with the fastest growing part of the world: east Asia. The country has about 40 trade offices, which he is starting to divert from western Europe towards Asia, with the Sweden office being replaced by one in Hong Kong and Finland's by one in China.

"We still trade with Europe, of course, but we need to diversify, and it's good to be involved now with places with no history of anti-Semitism, where we are just perceived as who we are, not as what others think we did or didn't do 2000 years ago."

Bennett has done business in Australia before and views this country as "the most pleasant place with which I've ever interacted. If I had to choose one other place after Israel, it would be Australia because people are very direct, honest and frank, and simply nice. You have a dynamic mentality and a down-to-earth approach."

He had a highly positive meeting with Tony Abbott during his visit, he says. And he notes that in four years it will be the centenary of the famous Anzac cavalry charge at Beersheba, now within Israel. Before then, he will be leading a few charges of his own.

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