Histadrut Rejects Government’s Proposal for an Economic Package

Histadrut, Israel’s powerful labor federation, last night rejected the unity government’s proposal for a package agreement developed in the government’s strenuous efforts to bring Israel’s raging inflation under control. The rejection came at the close of more than six hours of negotiations involving representatives of the Histadrut, the government and employers.

The rejected plan called for a one-third cut in cost-of-living increments for the next four months, with workers compensated by a five percent cut in their income taxes and a price freeze for the next six weeks. During that period, the government would preserve its right to impose new taxes and more subsidy reductions.

Haim Haberfeld, chairman of the Histadrut trade union department, declared that “these proposals cannot be a basis for negotiating a package deal,” and called them “totally unacceptable.”

Despite the opposition of the Histadrut and the government’s declared intention to introduce the package proposal by November 1, Finance Minister Yitzhak Modai radiated enthusiasm this morning, asserting agreement could be reached by tonight.

Eli Hurwitz, chairman of the committee of economic organization, was more cautious. He said that by the November 1 target date, certain agreements “could” be signed, and that, contrary to Haberfeld, he though there was a firm basis for the negotiations as they continued today.

TOTAL PRICE FREEZE DEMANDED

Meanwhile, the Histadrut’s Central Committee decided today to demand a total freeze on prices, including subsidized products, wages and texes. The committee said the Histadrut would not sign any agreement unless the government could guarantee total control of the requested freeze. But observers said that even if the government agreed to the freeze, the government lacked the personnel to conduct effective price controls.

Yisrael Kessar, Histadrut secretary general, told the Central Committee that the Histadrut came near a decision to boycott the talks because of a strange development which was tagged “The Night of the Frozen Poultry.”

Early Tuesday, the Treasury made a surprise announcement that prices on frozen poultry and meat would rise by 90 to 95 percent. After a loud consumer outcry, and complaints by Deputy Premier David Levy, the Treasury reduced the increase by nearly three-quarters — to 24 percent.

Kessar promptly charged that the government had joined “those who raised prices without any control” and that it had “lost all sensitivity to the workers.”

None of the ministers involved admitted being the “culprit” in the great poultry mystery.

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