Netanyahu - AP - Jan 19, 2011
Prime Minister Benjamin Netanyahu in the Knesset, January 2011. Photo by AP
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Prime Minister Benjamin Netanyahu presented the Israeli public with a package of benefits on Thursday, in which the minimum wage will increase, and gasoline, water and public transportation prices will decrease.

The steps Netanyahu presented along with Finance Minister Yuval Steinitz on Thursday are an effort to stave off a general strike due to the recent price hikes of basic goods such as bread, water, and gasoline.

During a government press conference in Tel Aviv, Netanyahu announced that the minimum wage will increase by NIS 450 per month, gasoline prices will decrease by 23 agorot, the water usage quota will decrease by 20% and public transportation prices will decrease by 10%.

"We are faced with a third crisis that is linked to the 2008 financial crisis," said Netanyahu at the press conference. The recovering economies demand a huge amount of energy – they drink lots of oil, which results in rising oil prices – and as a result gasoline prices rise, as do costs of transportation and food.

"We will cancel the 23 agorot increase in gasoline prices – an aid which targets the middle class. We will implement a two percent decrease in government budgets across the board in order to fund these steps," said Netanyahu.

Netanyahu presented the new steps to Knesset members including Finance Committee Chairman MK Moshe Gafni (United Torah Judaism), Economic Affairs Committee Chairman MK Carmel Shama-Hacohen (Likud), and MK Ofir Akunis (Likud), in his office prior to the press conference.

MK Haim Oron (Meretz) said, "The increased minimum wage and partial cancellation of price increases are appropriate – though minimalistic – steps. The problem of cost-of-living demands a systematic and conceptual change, at the center of which are increases in indirect tax and decreases in direct tax and membership dues.

MK Moshe Gafni (United Torah Judaism) said in response, "I welcome this set of decisions that will lead to a decrease in indirect taxes. It's a shame this was not done earlier, when we called for it over and over.

State Control Committee Chairman MK Yoel Hasson (Kadima) said, "This is another case of zigzagging - Netanyahu's attempt at survival. He only makes decisions under pressure and panic when he understands his seat is rocking... This is not an organized policy nor is it economic stability."

Miri Regev (Likud) said, "There is no doubt that increasing the minimum wage is as important as reducing the cost of public transport, but these only provide a partial solution to the weak populations and do not truly address the needs of the middle class."