Lowering cost of living is the government’s top priority, says PM

Judicial reform not mentioned in the prime minister’s overview of the government’s agenda.

By Batya Jerenberg, World Israel News

Getting prices down for the Israeli consumer is now the government’s first priority, Prime Minister Benjamin Netanyahu said at the start of the Sunday’s weekly cabinet meeting.

“We have passed the budget and this is an important step for stability,” Netanyahu said. “I have put forward a proposal for forming a ministerial committee to fight the high cost of living [and] I will chair the committee. I demand a schedule and a plan. The fight against the cost of living is our top priority. By working together we will succeed in lowering [it].”

In an Israel Democracy Institute (IDI) survey earlier this month, the high cost of living topped the respondents’ list of concerns by far, with 31% saying it worried them most. This was far more than the issues of judicial reform and personal security (15%), which have taken up most of the media chatter in the last several months. Over a quarter, 26% said they have “given up foodstuffs or other basic products,” over the past year due to economic hardship, and 12% had even cut back on education or health expenditures.

Most Israelis (60%) blamed the government for the situation, as food prices have shot up, including basics like bread, milk, chicken and vegetables, as well as utilities. The Bank of Israel has also steadily hiked interest rates to the highest it has been in 17 years in an attempt to fight rising inflation, which has added many hundreds of shekels to home-owners’ mortgage payments per month.

When campaigning before the elections that brought him back to power, Netanyahu had slammed the previous government’s supposedly weak response to higher costs and vowed in January after he won that “the first thing we are dealing with is the cost of living.”

A major effort to reduce the market control of big Israeli suppliers and thereby lower prices was deleted from the Economic Arrangements bill before it was passed last week. This was a clause requiring that the major food and pharmaceutical suppliers could only work with one “large manufacturer,” instead of many, which enabled them to corner the market on many types of products at once.

This is because the ten largest local suppliers from overseas producers are responsible for 53% of the products sold in supermarkets and pharmacy chains, Calcalist reported in January, so they can basically set the prices for the retailers.

The largest local marketing chains are also making good money off the Israeli consumer all by themselves, and the now-defunct proposal didn’t even address that issue. For example, supermarkets that fill their shelves with their own brand of products would not have been considered a supplier for the purpose of the law.

In a nod to this reality, 27% of those the IDI surveyed blamed Israel’s large monopolies rather than the government for their worse economic state.

It is common knowledge that Israelis pay some of the highest prices in the OECD for food and pharmaceuticals.