Smotrich knows that even though the rise in prices began before he took office, he will be tested on his success in fighting it (Photo: Rafi Ben Hakon, PM)
The Minister of Finance, Betzlala Smotrich marked one of his first goals in the war on price increases - and it turns out to be a big goal.
The increase in the prices of electricity, water, property taxes and fuel fell on the Minister of Finance, Bezalel Smotrich, three days after he was sworn into office.
In the narrow gap between entering the office and the price hike taking effect, his ability to maneuver and react was zero to non-existent.
Smotritz, who was forced to absorb the wrath of the public for a move that had no effect on him, intends to fight back - and in one of the most sensitive areas, the price of milk.
This coming May, a price increase is expected to affect every household in Israel, especially the weaker sections: a 15% increase in the prices of regulated dairy products.
Supervised dairy products, food found in almost every home: milk, white, yellow cheese (by weight), cream, Eshel and Gil (Photo: ShutterStock)
How do you cancel an expected increase in price of about 15%?
The sharp increase in dairy products in four months is part of the agreement signed in August between the heads of the dairy industry, the ministries of finance and agriculture.
The supervised milk prices are determined by the price committee, which calculates the increase in the "target price" of milk, the price of raw milk paid by the dairies to dairy farmers, and weighs it with production costs.
Its recommendations are submitted to the ministers of finance and agriculture, who discuss them and decide whether to approve them.
At the beginning of September, the dairies agreed to raise prices by "only" 4.9% instead of 10% as stipulated by the Price Committee, and to freeze the price increase until May, in exchange for switching to an automatic price update mechanism once per quarter, instead of the committee, which would free them from depending on the approval of the committee's recommendations on by the ministers.
Since the target price increased sharply last week and it is added to a year's debt that exists for the dairies, who did not raise the price in full, the price increase is expected to reach 15% in May.
Upon assuming office, Smotrich turned to the professional ranks at the Ministry of Finance and asked them to present to him ways to prevent the increase in the prices of dairy products under supervision, which include: milk, yellow cheese by weight, white cheese, sweet and sour cream, Eshel and Gil.
The options currently on the table are a demand from the dairy farmers and dairies to give up part of the increase in the target price in order to moderate the increase in prices, a government subsidy for the increase in the price - something that the Treasury strongly opposes, and legislation that will establish that the minimum price that the departments can pay dairy workers for raw milk will be 2.15 in the four quarters the near ones
At the moment it is difficult to assess which of the solutions (or a combination of more than one of them).
In any case, it is clear that the Minister of Finance, who chose to focus his efforts on the milk market, will not let prices rise by a double-digit rate.
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milk
Cost of living
Minister of Finance
Bezalel Smotrich
