Prime Minister Benjamin Netanyahu and Minister of Finance Bezalel Smotrich have agreed in principle to partially or fully freeze the price rises in electricity, water and local authority/municipal taxes. In talks last night with Minister of Economy and Industry Nir Barkat, there was a consensus that the cost of living is the most important immediate problem on the agenda, and that it should be dealt with in the short term and without waiting for the budget.
The Public Utilities Authority (Electricity) decided on an 8.2% hike in electricity rates from January 1, rejecting requests to spread the price rise over a longer period, and despite estimates that coal prices - the main cause of the price increase - will not continue to rise.
The Israel Water Authority announced a 3.5% increase in the price of water for consumers from January 1, due in part to the increase in electricity prices. Municipal and local authority taxes (arnona) had been expected to increase from the beginning of January by between 1% and 3%, following a decision by the Ministry of the Interior last year.
Implementation of such a freeze is the responsibility of the Ministry of Finance, which has been asked to present, as quickly as possible, the costs and effects, and the scope required for immediate budgeting compared with strategic measures that could be implemented through the state budget.
Ministry of Finance officials are reluctant to make any declarations about price freezes until sources for the required financing are found and the financial impact of any such measures is fully examined.
Published by Globes, Israel business news - en.globes.co.il - on January 3, 2023.
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