A new free-market oriented initiative designed to lower the cost of living in Israel was unveiled in Jerusalem on Monday.
The Emergency Plan to Lower the Cost of Living is the brainchild of a coalition of social activist organization, economic experts, high-tech workers, and participants in the 2011 social justice protest was announced at the economic conference Israel 2050, organized by the National Union of Israeli Students.
The plan focuses on the five most expensive living costs in Israel: food, housing, transportation, banking and energy. It offers practical solutions that include limits on the right to strike in vital industries; instituting transparency by canceling the status of so-called "Ottoman societies," including the Histadrut labor federation; removing restrictions on imports; addressing standards and licensing in the food industry; removing planning and marketing obstacles in the housing market; implementing the recommendations of the Committee for Increasing Competition in Common Banking Financial Services (the Strum Committee) to increase incentives to found new banks; opening the transportation market to ride-hailing; introducing competition in the natural gas market; and dismantling the Israel Electric Corporation's monopoly by selling most electricity-generating units to the private market.
The Israel 2050 plan was overseen by Dror Strum, former director of the Anti-Trust Authority and currently president of the Israeli Institute for Economic Planning; Dr. Michael Sarel, former chief economist at the Finance Ministry and currently head of the Kohelet Policy Forum; and Nili Even-Chen, deputy director for economics and research in the Movement for Quality Government.
The leaders of the plan are asking party leaders to define how they will address the root problems of the high cost of living in Israel and want them to sign a document promising to make the cost of living a top socio-economic priority for their parties.
At Monday's conference, Justice Minister Ayelet Shaked committed to the plan.
Speaking to Israel Hayom, Sarel said that "policymakers need to understand that the public is sick of cosmetic, populist solutions and wants the cost of living issue to be addressed at its root."
According to Sarel, who resigned from the Finance Ministry five years ago in protest over then-Finance Minister Yair Lapid's plan to eliminate value-added tax, the Israel 2050 plan will succeed where the 2011 protest movement failed.
"The tent protest made general, vague demands without any plans or in-depth analysis, and the result was that the wool was pulled over the public's eyes with wasteful plans like 'Mehir Lemishtaken' [the 'Move-In Price' program to subsidize housing for first-time home buyers], which cost the public twice the amount of the benefits to the people who bought homes.
"The plan we wrote addresses the fundamental problems, not symptoms, and emphasizes increased competition, open markets, fighting the monopolies and cartels, and in the field of housing – creating incentives for local authorities to build new neighborhoods while lowering the tax breaks that lead to too much demand purchase housing as an investment," Sarel said.
"Thanks to the plan, the cost of living will take center stage in the last few weeks before the election," he said optimistically.
