In response to rising prices in many areas of the economy, and to growing public pressure, Prime Minister Benjamin Netanyahu presented a series of concessions to ease the economic burden of rising prices, especially of fuel, on Israel's citizens. Netanyahu spoke at a press conference at 6pm this evening.

The excise on gasoline, which was raised on January 1, will be cut by NIS 0.23 per liter, effectively erasing the rise in the price. The measure will cost the Treasury NIS 755 million this year.

Netanyahu said he will support raising the minimum wage by NIS 450 per month in two stages, one of NIS 250 and one of NIS 200.

Water rates, which have risen 33% in the past year, partly in an effort to reduce consumption because of the severe drought, were changed. The amount provided at a lower rate was increased by 20%. The reduction is progressive, based on information about poor families provided by the National Insurance Institute.

Bus and train fares, which were recently raised, were cut by 10%. The cost to the government is NIS 300-400 million a year.

Netanyahu is financing the concessions from the tax surplus and reductions in ministries' budgets, with the exception of defense. In addition, there will be a freeze in a planned one percentage point cut in individual income tax rates, for most tax brackets. The cut was planned for 2012. Additionally, there is a freeze in the reduction in the companies tax rate by one percentage point, which was due to fall to 23% next year.

At the press conference, Netanyahu was surrounded by Minister of Finance Yuval Steinitz, Minister of Interior Eli Yishai, and Knesset Finance Committee chairman MK Moshe Gafni (United Torah Judaism).

Published by Globes [online], Israel business news - www.globes-online.com - on February 10, 2011

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