Opinion | The steps are important, but this is just the beginning Israel today

The government's plan to lower the cost of living in Israel is a significant and important first step of the change government on the road to lowering the cost of living, and it should be felt in the pockets of many families in the coming days.

Israel will be tens of percent more expensive than other developed countries, and the last wave of price hikes that followed it following the global crisis was the straw that broke the camel's back.

The government's response to this is to lower tariffs on a variety of consumer products, which is expected to have an impact over a period of months and reduce the prices of imported products - and thus also affect those produced in Israel.

Bennett and Lieberman announced: We will reduce taxes and reduce tariffs // Photo: GPO

It must be said that the recent wave of price hikes, halted in part by recent pressure from Finance Minister Lieberman and Minister of Economy and Industry Barbibai, began primarily with the government itself raising taxes - such as the one-time tax and the tax on sugary drinks at the height of the crisis.

This may have been a mistake, even though these are correct and justified taxes.

But to the credit of the decision-makers it will be said that they are aware of the economic distress of the citizens, and the plan was quickly prepared.

However, there is also criticism.

The main step of the program that increases the net of families with children aged 12-6 is done without an income test.

In other words, the benefit of NIS 223 per child per month will also benefit parents who earn a salary of NIS 30,000 and 40,000, as well as those who earn a salary of NIS 10,000.

This step amounts to more than two billion shekels for the state coffers, and if it had been done differently, additional benefits could have been added to the middle class and the weaker sections.

Another notable step that has been announced is the abolition of the excise tax on coal - which will moderate the increase in the electricity tariff starting this month.

This is an important step, as the electricity tariff not only affects the expenses of all households, but also the expenses of manufacturers and importers, thus raising the cost of living.

However, another excise tax that also affects the cost of living - on fuel - will not go down as we first considered, so the price of fuel will remain among the highest in the world.

The Treasury explains that lowering the excise tax on gasoline is contrary to the government's carbon tax policy, and the question is whether lowering the excise tax on coal is not contrary to this policy.

Minutes after the plan was announced, angry responses were received from independent organizations, who expected until the last minute that the government would also announce in the plan the compensation outline for business owners affected by the slowdown in the Omicron wave - which did not happen.

The Treasury is not interested in distributing money from helicopters, and prefers to wait for the companies' financial statements to know who is really eligible for assistance and who is not.

These are VAT reports that are submitted in just a week and a half, and that can indeed target aid to businesses that have really been hit, so that the insistence on waiting until then can be understood.

Beyond that, when talking about the cost of living in Israel, one must take into account the heavy expenditure of most Israelis - the expenditure on housing, whether it is rent or mortgage payments.

Rising real estate prices in Israel are an acute problem that requires a long-term solution, and the government housing plan that was presented at the end of last year will probably not be this solution.

Bottom line - the plan is the government's first swallow.

We hope that the sequel will still come, and that the missing things in the plan will still be completed after thorough work as required.

It does not really matter if it was prepared as a result of public pressure or as a result of the goodwill of the government.

What is important is that it is time to address a chronic problem that Israel has been suffering from for more than a decade, and that is - a high cost of living.

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