Cabinet approves Trajtenberg competition recommendations

Dairy and egg products will soon come under tighter supervision, and tenders will be published for new public transportation companies and gas stations.

December 18, 2011 22:49
2 minute read.
Prof. Trajtenberg hands recommendations to PM Neta

Prof. Trajtenberg hands recommendations to PM Netanyahu [file]. (photo credit: GPO)


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Dairy and egg products will soon come under tighter supervision, and tenders will be published for new public transportation companies and gas stations, after the cabinet on Sunday unanimously passed the Trajtenberg Report’s recommendations on competition.

This was the second of the report’s four chapters to be approved by the cabinet, with housing and social services still to come. The cabinet previously passed an amended version of the chapter on taxation, segments of which have already passed the Knesset. The Trajtenberg Report was commissioned by the government in response to this summer’s wave of public protests over the cost of living.

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“We are reducing the power of the monopolies and the bureaucracy,” Prime Minister Binyamin Netanyahu said Sunday. “Governmental bureaucracy is the largest of all, and this has also been dealt with. We were a small and concentrated economy, the problem being that the economy grew but remained concentrated in both the private and public sectors. Approval of this chapter corrects imbalanced created over decades.”

Pending Knesset approval, the government will publish tenders for the creation of new public transportation operators in a bid to reduce the cost of travel. A national public transportation authority will be set up, together with several regional authorities. Tenders will also be published for the creation of 40 new gas stations, with all companies holding more than 10 percent of existing stations to be prohibited from the application process.

Committees will be established to supervise the price of dairy and egg products and of gas for household consumption.

The cement industry will be opened to outside competition in a bid to reduce the cost of housing.

The powers of the Antitrust Authority, which is tasked with regulating mergers and anti-cartel enforcement, will be strengthened. The authority’s director-general will be given power to demand details of manufacturing and sales calculations from large chains to ensure they do not charge unreasonable prices.

The creation of new terminals at the Haifa and Ashdod seaports will also be prioritized in a bid to decrease the costs of importing and exporting.

Earlier Sunday, Bank of Israel Governor Stanley Fischer said many other successful economies, such as Singapore, Hong Kong and Belgium, suffer from over-concentration. However, that does not make it an ideal situation for Israel, he said at the beginning of a three-day conference on corporate governance and economic concentration at the Hebrew University of Jerusalem.

Fischer applauded the recommendations made by the Trajtenberg Report on the removal of importation barriers, which were included in the chapter on taxation.

“Contrary to intuition, it is not always economically correct to protect the local companies from exported competition,” he said.

Although real income is high, Fischer said, the standard of living here is still roughly two-thirds of that in the US.

“There is a feeling that this is because of over-concentration,” he said, “but it is also connected to agriculture, which is not over-concentrated but does benefit from protection.”

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