Steinitz: Drought levy painful, but necessary

Draught Levy is painful

steinitz gafni 248 88 aj (photo credit: Ariel Jerozolimski )
steinitz gafni 248 88 aj
(photo credit: Ariel Jerozolimski )
Finance Minister Yuval Steinitz on Wednesday said that while he would allow slight amendments to the drought levy, he opposed the cancellation of the "painful but necessary" tax. During a briefing at the Knesset's Finance Committee, the minister reportedly said that "together with the public opinion campaign, the levy is finally leading to lower water usage rates. Finally, something real is begin done in face of the economy's water problems. " Steinitz defended the levy and warned that lack of taxation could have serious consequences, Army Radio reported. "We do not want to reach the same situation as Cyprus. They did not tax water usage, and today a large part [of the country] only has water every other day." Steinitz went on to predict that Israel's economic growth would be higher than one percent in the second half of the year, but warned that Israel had not completely recovered from the financial crisis, and that there was "still a long way up." "We were worried we would have the same unemployment rates as in North America and Europe. Unemployment in Israel is high [8%], and it is a situation that we cannot accept for a long time, but we did not reach the high rates we had feared," Steinitz told the committee. In related news, National Infrastructures Minister Uzi Landau (Israel Beiteinu) on Monday announced that he will submit a government decision in the coming days to propose gradually increasing water prices rather than raising them precipitously on January 1. The other part of the decision would mandate that proceeds from the drought levy be used for water infrastructure purposes. As of now, drought levy funds go straight back into the Treasury's pocket. Ehud Zion Waldoks contributed to this report