Minister of National Infrastructures Uzi Landau says that the government should bear the cost of an additional 18% hike in water rates over the coming year, which will follow the 25% hike that came into effect last Friday. He proposes that this portion of the rate hike should be offset by a 0.5 percentage point reduction in VAT.
Ahead of this morning's meeting of the Knesset State Control Committee, Landau said, "First of all, I say that I see one clear goal: to ensure that the water economy won't be harmed. Water rates rose 25% on Friday, and that was after we blocked a much sharper rate hike of over 40% in a single act. Such a measure is part of the reform aimed at saving Israel's water economy."
Last week, State Comptroller Micha Lindenstrauss told the State Control Committee that the water tariff hike was problematic, and that it should be frozen until a proper master plan is launched for the water economy.
Landau replied then that the water tariff hike should go ahead, but quickly moderated his stance, saying that only the first rate hike should be implemented, and that the next hikes should be paid by the Ministry of Finance, not the public.
Published by Globes [online], Israel business news - www.globes-online.com - on January 5, 2010
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