Daily Israel Report

Major Economic Package Unveiled to Avert General Strike

The government will raise the minimum wage and drop the price of bread, gasoline and water in order to avert a general strike, PM Netanyahu says.
By Chana Ya'ar
First Publish: 2/10/2011, 9:31 PM / Last Update: 2/10/2011, 9:24 PM

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Prime Minister Binyamin Netanyahu announced a package of benefits Thursday designed to head off a general strike prompted by the rise in the price of basic commodities such as water, bread, and fuel.

The plan, which Netanyahu presented at a Tel Aviv news conference together with Finance Minister Yuval Steinitz, includes a hike in the minimum wage, while prices for water, gasoline and public transportation will all drop.

Finance Committee Chairman MK Moshe Gafni (UTJ), Economic Affairs Committee Chairman MK Carmel Shama-HaCohen (Likud) and MK Ofir Akunis (Likud) met with the prime minister to discuss the measures prior to the news conference.

“There are signs of another crisis developing as commodity prices around the world are rising, which is also affecting prices in Israel,” the prime minister said. “As a result gasoline prices increase, as do costs of transportation and food. We cannot control commodity prices. However, we can present responsible solutions for the current situation,” he said.

Netanyahu blamed the 2008 world financial crash for the current economic crisis, which he said was Israel’s third since world markets went into a fiscal tailspin.

“The recovering economies demand a huge amount of energy. They drink lots of oil, which results in rising oil prices, and as a result gasoline prices rise, as do costs of transportation and food,” he said.

Under the proposal, full-time wages for those earning a minimum wage would increase by NIS 450 (about $130). The price of gasoline would drop by 23 agorot (about six cents) per liter, and public transportation fares would decrease by 10 percent.

The quota for usage of water would decrease by 20 percent. “People who are saving more in their water usage will pay less, and those who are using more than average, for example to water their garden, will pay more,” the prime minister said.

In order to pay for the measures, Netanyahu explained, “We will implement a two percent decrease in government budgets across the board in order to fund these steps.” He added, “The cost of the solutions we are presenting today must not break the budget ceiling.”