Minister of Finance Bezalel Smotrich and Histadrut (General Federation of Labor in Israel) chairperson Arnon Bar-David met today to discuss the Ministry of Finance’s plans for the 2025 budget, some of which go against the interests of the workers’ organization and will require its consent. The main point at issue is the Ministry of Finance’s intention of saving NIS 8 billion by freezing the pay rise that public sector workers are due to receive over the coming months. In addition, the Ministry of Finance seeks to freeze the minimum wage component in the pay of public sector workers, and to suspend the revision of tax brackets, which will affect all workers.
In an attempt to temper opposition, Smotrich came to today’s meeting with a confidence-building measure up his sleeve. Bar-David was told at the meeting that the Ministry of Finance’s official budget proposal to the government would include a plan to close unnecessary government ministries. Such a step will not prevent the erosion of workers’ salaries, but it echoes statements made by the Histadrut chairperson.
In the first months of the war, the Histadrut consented to accept a program whereby every worker would "contribute" one vacation day’s pay, worth hundreds of shekels per worker, to finance the budget for drafting reserve soldiers. The organization subsequently made clear that it would not accept further such measures until the government cut spending on coalition party programs sharply, and closed non-vital ministries. Smotrich’s idea is to close five ministries, one for each coalition party.
Dousing the flames
Smotrich’s determination and his ability to obtain the consent of his coalition partners to the closure of ministries await proof. This is, however, an apparent change of policy on the part of the minister of finance, who up to now has refused to adopt the recommendations of the professionals in his ministry to close the ministries. Dismantling the bureaus of ministers and deputy ministers will not save significant amounts in the context of the state budget, but it will at least broadcast a sense of responsibility on the part of the leadership, at a time when Smotrich is calling on workers to lend a hand and participate in the heavy costs of the war through taxation measures and cutbacks.
At the meeting with the Histadrut, Smotrich and his aides presented the plans, but the discussion did not go into details. It was agreed that dialogue between the sides would continue, and would examine all aspects of the budget.
Two weeks ago, tension arose between Smotrich and Bar-David, because of the general strike declared by the Histadrut chairperson in support of demands for a deal to release the Israeli hostages held by Hamas in the Gaza Strip. Smotrich obtained a court order to halt the strike, and accused Bar-David of "fulfilling Sinwar’s dream."
Now, Smotrich is attempting to douse the flames, and to harness Bar-David to the effort to save billions of shekels in public spending. "The meeting took place in a good atmosphere and the two agreed that they would work together in a spirit of responsibility, out of recognition of the challenges facing the State of Israel and for the sake of the economy of Israel, the good of the workers, and for the sake of all Israel’s citizens. The meeting was held in the light of progress made in constructing the 2025 budget, and was part of a series of discussions being held by the minister of finance with all players in the economy," a statement issued on Smotrich’s behalf after the meeting said.
Published by Globes, Israel business news - en.globes.co.il - on September 12, 2024.
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