Are gas prices about to soar? Sharp confrontation between senior finance officials and the minister's office/ShutterStock
A real drama has been unfolding in recent days at the Ministry of Finance, on two different levels. On the level that touches everyone's pocket: the price of fuel.
While global gasoline prices are soaring, in Israel the increase was only moderate, thanks to the decision of former Finance Minister Avigdor Lieberman. Reduce excise duty - the indirect tax imposed on fuels. The current Minister of Finance, Bezalel Smotrich, adopted the method and extended the reduction at any given time.
Gasoline prices, it should be noted, have a lateral effect on all prices in the economy, since from production expenses to marketing expenses, an increase in their prices makes the process more expensive, and in an era when the profits of manufacturers and importers have suffered, the additional cost is passed on to the end consumer, the citizens.
However, this reduction also means hundreds of millions of shekels missing from the state coffers, which are slowly accumulating to a significant sum, with each such extension. In fact, this is what is known as "pent-up inflation": price increases that are not reflected in the consumer price index, but are halted by a budget deficit.
Finance Ministry officials have already warned that the fuel subsidy will no longer be able to continue, and that what was possible a year ago, when state tax revenues broke every record, is impossible in light of the reality of declining state revenues.
The problem is that politically this is bad news for the finance minister and prime minister: not only are they unable to curb the increase in the cost of living (even before the price increase expected after the holiday), but it is even increasing – and as mentioned, an increase in the price of gasoline is an immediate blow to the pockets of every citizen, even before it translates into an overall price increase.
Against this background, stormy discussions are taking place in the Ministry of Finance, with senior officials in the Budget Department warning that an additional extension of the tax reduction is impossible. It is believed that things have reached the brink of an explosion.
Minister of Finance, Bezalel Smotrich against the background of the Ministry of Finance. Falling apart from within?/Flash 90, Avshalom Shoshoni
Is the Finance Ministry falling apart?
As if the battle over fuel wasn't enough, another front opened up in the office. The ministry's head of education, Eli Morgenstern, is an ultra-Orthodox man who also dealt with ultra-Orthodox education (which made headlines as part of the coalition commitments) and is considered one of the most respected in the treasury. He left office before the end of his term.
Sources familiar with the details say that "he had the courage to put down the keys, against the background of the difficult and intolerable conduct."
According to the sources, this refers to the recent money transfers that he could not stand behind. Other sources explain that this refers to the hijackings carried out by the Finance Committee. Moreover, following Morgenstern's move, it is claimed that other senior officials intend to leave. One of the sources we spoke to said: "You can't act like this, the Finance Ministry is falling apart."
- More on the subject:
- Fuel price
- Ministry of Finance
- Budget Division
- Minister of Finance
- Bezalel Smotrich