Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich, this evening (Wednesday, 11 January 2023), at the Prime Minister's Office in Jerusalem, presented the plan regarding price increases in the economy, including a series of steps to reduce the increases in the prices of electricity, water, fuel and property taxes, and assist the economically disadvantaged in dealing with the cost-of-living.
Prime Minister Netanyahu:
"Given that my government has put the cost-of-living, the fight against the cost-of-living, at the top of its priorities, we will not wait. This evening we are announcing a series of preliminary steps to fight the factors driving inflation: Electricity, water, fuel and property taxes. It is important for me to emphasize that these steps will immediately reduce the monthly expenditures of every family in Israel, and that these steps will also do something else – they will slow the pace of the price increases and will begin to turn things around."
Finance Minister Smotrich:
"As soon as I took up my position in the Finance Ministry, I have been dealing with the cost-of-living with utmost seriousness. I have been working day and night to formulate solutions. We have held a series of discussions in order to formulate a plan while keeping to the budgetary framework and without breaking the principles and rules and fueling inflation. This is an immediate, emergency plan, and in the framework of the state budget – with G-d's help – we will formulate major steps and a series of deep reforms."
Following are the main points of the plan to deal with price increases in the economy:
* Reducing the increases in the price of electricity
The excise tax on coal will be reduced; therefore, the Electricity Authority will be able to reduce the increase in electricity prices by approximately NIS 60 per annum per household (an almost 15% reduction in the price increase).
In the coming weeks, the government will be presented with additional steps to further reduce the price. The overall steps are expected to lead to a reduction of approximately NIS 240 per household which, together with assistance for the economically disadvantaged, will reduce the overall increase in the price of electricity per household by approximately 70%. For small and mid-sized businesses, the planned steps will lead to the complete cancellation of the increase in the price of electricity.
* Reducing the increases in the price of water
The increase in the price of water will be reduced by a similar amount to the reduction in the price of electricity. As a result, households will save increases of dozens of shekels per annum. This will come about as a result of the reduction in the increase in the price of electricity and Mekorot's cancellation of its dividend. The savings will instead be used to reduce the price of water.
* Assistance to the economically disadvantaged in dealing with the cost-of-living:
The heating grant will be partially advanced; those eligible for the grant will receive now, instead of in October, a payment of approximately NIS 200 in order to assist them in dealing with the cost-of-living at this time of year.
The heating grant is NIS 608 and is paid in October by the National Insurance Institute to around 300,000 elderly who are entitled to income support or disability payments.
* Freezing the increase in the price of fuel:
The excise tax on fuel will be reduced by NIS 0.10 by the end of 2023. This will allow for the cancellation of the NIS 0.09 increase in the price of fuel (gasoline) that took effect on 1 January 2023, and will assist in lowering the price during the year.
* Freezing the increase in property taxes:
The up to 1.37% increase in property taxes for residences, which took effect this month, will be frozen. This step is expected to save an average of NIS 70 per annum per household.
In addition to these steps, automatic compensation mechanisms, which increase households' available income, took effect this month.
* Increases in National Insurance Institute support payments:
National Insurance Institute support payments rose this month in accordance with the updated indices. Most payments were updated by 5.3%, in accordance with the Consumer Price Index; disability payments were updated by 9.8%.
* Reduced deductions for national insurance and the health tax:
The collection brackets for national insurance and the health tax were updated this month by 2.5% in keeping with the increase in the average wage.
All workers with monthly income of over NIS 6,331, will benefit from reduced deductions for national insurance and the health tax of up to NIS 67 per month.
* Reduced taxation:
Income tax brackets were updated this month in keeping with the Consumer Price Index. The value of credit points was also updated with the value of one point rising from NIS 223 to NIS 235.
Prime Minister Benjamin Netanyahu and Finance Minister Bezalel Smotrich, this evening (Wednesday, 11 January 2023), at the Prime Minister's Office in Jerusalem, presented the plan regarding price increases in the economy, including a series of steps to reduce the increases in the prices of electricity, water, fuel and property taxes, and assist the economically disadvantaged in dealing with the cost-of-living.
Prime Minister Netanyahu:
"Given that my government has put the cost-of-living, the fight against the cost-of-living, at the top of its priorities, we will not wait. This evening we are announcing a series of preliminary steps to fight the factors driving inflation: Electricity, water, fuel and property taxes. It is important for me to emphasize that these steps will immediately reduce the monthly expenditures of every family in Israel, and that these steps will also do something else – they will slow the pace of the price increases and will begin to turn things around."
Finance Minister Smotrich:
"As soon as I took up my position in the Finance Ministry, I have been dealing with the cost-of-living with utmost seriousness. I have been working day and night to formulate solutions. We have held a series of discussions in order to formulate a plan while keeping to the budgetary framework and without breaking the principles and rules and fueling inflation. This is an immediate, emergency plan, and in the framework of the state budget – with G-d's help – we will formulate major steps and a series of deep reforms."
Following are the main points of the plan to deal with price increases in the economy:
* Reducing the increases in the price of electricity
The excise tax on coal will be reduced; therefore, the Electricity Authority will be able to reduce the increase in electricity prices by approximately NIS 60 per annum per household (an almost 15% reduction in the price increase).
In the coming weeks, the government will be presented with additional steps to further reduce the price. The overall steps are expected to lead to a reduction of approximately NIS 240 per household which, together with assistance for the economically disadvantaged, will reduce the overall increase in the price of electricity per household by approximately 70%. For small and mid-sized businesses, the planned steps will lead to the complete cancellation of the increase in the price of electricity.
* Reducing the increases in the price of water
The increase in the price of water will be reduced by a similar amount to the reduction in the price of electricity. As a result, households will save increases of dozens of shekels per annum. This will come about as a result of the reduction in the increase in the price of electricity and Mekorot's cancellation of its dividend. The savings will instead be used to reduce the price of water.
* Assistance to the economically disadvantaged in dealing with the cost-of-living:
The heating grant will be partially advanced; those eligible for the grant will receive now, instead of in October, a payment of approximately NIS 200 in order to assist them in dealing with the cost-of-living at this time of year.
The heating grant is NIS 608 and is paid in October by the National Insurance Institute to around 300,000 elderly who are entitled to income support or disability payments.
* Freezing the increase in the price of fuel:
The excise tax on fuel will be reduced by NIS 0.10 by the end of 2023. This will allow for the cancellation of the NIS 0.09 increase in the price of fuel (gasoline) that took effect on 1 January 2023, and will assist in lowering the price during the year.
* Freezing the increase in property taxes:
The up to 1.37% increase in property taxes for residences, which took effect this month, will be frozen. This step is expected to save an average of NIS 70 per annum per household.
In addition to these steps, automatic compensation mechanisms, which increase households' available income, took effect this month.
* Increases in National Insurance Institute support payments:
National Insurance Institute support payments rose this month in accordance with the updated indices. Most payments were updated by 5.3%, in accordance with the Consumer Price Index; disability payments were updated by 9.8%.
* Reduced deductions for national insurance and the health tax:
The collection brackets for national insurance and the health tax were updated this month by 2.5% in keeping with the increase in the average wage.
All workers with monthly income of over NIS 6,331, will benefit from reduced deductions for national insurance and the health tax of up to NIS 67 per month.
* Reduced taxation:
Income tax brackets were updated this month in keeping with the Consumer Price Index. The value of credit points was also updated with the value of one point rising from NIS 223 to NIS 235.
