(photo credit: REUTERS)
Prime Minister Benjamin Netanyahu on Sunday called on Finance Minister Yair Lapid to reduce or completely do away with import duties on food products, while proposing that owners of three or more homes be taxed to cover resulting budgetary shortfalls.
“This is a step that would immediately create competition and lower prices,” Netanyahu said during a strategic discussion on the Israeli economy with his office’s National Economic Council.
The Prime Minister’s Office found that duties on some items significantly increased the price to consumers such as the 55 percent tariff on milk and 40% tax on milk-based drinks, which are being passed on directly to shoppers. Import taxes added 28% to the cost of yogurt; 36% to the price of soft cheeses; 41% to butter; 30% to eggs; 17% to olive oil; and 12.1%- 21.7% on frozen chicken, according to the PMO.
Lapid and Economy Minister Naftali Bennett already have reduced import tariffs on certain dairy products and meats, and the government has approved their plan to reduce duties on pasta, cereals and grain imports, which is set to go into effect in 2015.
Food prices have become a persistent political problem for the government over the past few years. In 2011, the high price of cottage cheese paved the way for massive street protests on the cost of living, and, more recently, a viral Facebook posting comparing the high price of a local pudding snack, Milky, to the price of a similar product in Germany sparked outrage.
Lapid has responded by calling for more products to be placed under price supervision, which would regulate their sale price.
Sunday’s declaration took place during a meeting with PMO Chief Economic Adviser Eugene Kandel on preparing Israel’s labor force for the future and increasing human capital.
“We must put people center with an emphasis on imparting fitting skills and redesigning the relationship between labor and the economy based on the north European model,” Kandel said.
Kandel’s reference to north Europe was to a model of investing directly in human capital, as opposed to one that focuses on investing in the work place, which he ascribed to countries such as Portugal, Italy, Greece and Spain.
In a survey of future labor-market expectations, Kandel said manual or repetitive jobs, such as broker, insurance agent and dispatcher, were at high risk for disappearing. The more promising fields were those that relied on creativity, emotional intelligence and the ability to respond to changing circumstances such as research, caregivers and managers.
The fear is that the narrowing out of mid-level jobs would create greater inequality, leaving an abundance of jobs at the low and high ends of the wage spectrum.
Most of the recommendations focused on education, training and creating tools to help people change and advance their careers.