Histadrut chair Ofer Eini at Labor Court_311.
(photo credit: Marc Israel Sellem)
Following productive late-night meetings with Finance Minister Yair Lapid,
Histadrut labor federation chairman Ofer Eini postponed on Tuesday a meeting to
declare a labor dispute that would pave the way for a general strike after two
Lapid agreed not to tax education funds, a red line for Eini, at a
cost of NIS 2.5b to the state. Lapid also promised to include the Histadrut in
discussions on the economic arrangements law and reforms for the ports and
public services, Calcalist reported.
The fate of NIS 2b. worth of wage
cuts planned for public sector workers remained unresolved. One solution on the
table was to simply postpone planned wage increases until 2015, which would save
the treasury NIS 1b. Despite progress with the labor unions, however, a slew of
other interest groups continued to mount pressure on Lapid to spare them from
Labor MK Itzik Shmuli, complaining that the finance minister
did not respond to his questions within the Knesset, posted a note on Lapid’s
Facebook wall urging him to focus not only on hitting deficit and inflation
targets, but also poverty reduction and inequality targets.
just and also not right that basic issues like raising taxes and changes in the
transfers budget will be examined only through the prism of growth, and cut off
from the consequences to the poverty level and damage to the social fabric,” he
The Federation of Israeli Chambers of Commerce (FICC) came out
against a planned 6% increase in textile import taxes, which the previous
government had planned to reduce.
“Canceling the reduction could lead to
a 90% increase of prices on products that are passed on to the consumer,” said
Yoram Dar, the FICC’s retail networks chairman.
“We’re talking about a
price increase that will cost the public NIS 600 million a year, where the
primary victims are the middle and lower classes.”
Jerusalem Institute for Market Studies (JIMS), an open market think tank,
released a study that the corporate tax rate in Israel, at 25%, was higher than
those of similar economies, which averaged 23.6%.
“The one percent rise
in corporate tax rate planned by the Finance Ministry will hamper economic
growth more than cuts in the government’s budget or a rise in other taxes,” the
According to Ori Katz, who authored the study, “Countries
with a large domestic market such as Japan, the US and France can afford
relatively high tax rates, since corporations are willing to pay in order to be
based near them. Countries similar in size to Israel opt for much lower
corporate tax rates, and most of them have a lower rate than Israel.”
Monday, Deputy Defense Minister Danny Danon met with the head of the Israel
Manufacturers Association in an “emergency meeting” over defense budget cuts,
which they said would amount to NIS 6b. over the next two years.
prevent the irresponsible cuts to the defense budget,” Danon said. Cutting the
defense budget, he said, would not only harm Israel’s security, but impact the
“The defense industry is the social and security might of the
state of Israel,” he stated.Globes contributed to this report.
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