Israeli consumers have been granted a reprieve from sharp hikes in the prices of basic commodities and services until after the holiday season which begins Sept. 24 and ends Oct. 18. Increases of between 25-40 percent were to have gone into effect Sept. 1 according to an announcement by Arnon Gafni. director general of the Finance Ministry. But vigorous protests by Histadrut and members of the Cabinet resulted in the postponement announced in a Finance Ministry communique.
The communique, issued by Finance Minister Yehoshua Rabinowitz stated that government and Histadrut officials will meet this week to discuss a long term agreement on the issue of government subsidies for the affected Items. The subsidies must be reduced or eliminated to keep within the IL 1.45 billion budget. The subsidized goods include bread, milk, and other dairy products, eggs, cooking oil and frozen poultry. Public transportation is also subject to reduced subsidies.
Some economic circles here criticized the delay on grounds that Histadrut secretary general Feruham Meshel had agreed in principle to price increases as of Sept. 15. But the Histadrut central committee members who are to negotiate on the subsidy issue declared they would oppose any rise in prices before the end of the holidays.
Economists claim that the government will have to find an additional IL 400 million if it is to keep the price increases as low as possible. Since the present budget reserves have been exhausted, the extra money would have to come from budget cuts elsewhere–which seems out of the question at the moment–or from additional budget requests to the Knesset, the economists said.
The latter would bring in its wake demands from various ministries whose budgets have been slashed and who have refrained from asking for more money because they were made to understand that there would be no more during the present fiscal year. Rabinowitz said on a radio interview last week that the prices of subsidized goods would have to be raised immediately if the government is to remain within its budget.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
