Olmert Chills Out on Dairy Reforms

Newly appointed acting Finance Minister Ehud Olmert promised kibbutz industry managers yesterday that basic milk and dairy products would remain under state regulation and price restrictions.

"But there will be no protection for products such as Milky," he told them, referring to the popular dairy dessert.

However, Olmert's commitment yesterday sits uncomfortably with the economic arrangements bill, drawn up by his immediate predecessor Benjamin Netanyahu, who resigned abruptly last week.

According to the proposed legislation, 18 dairy products, constituting 40 percent of the entire dairy market, would be deregulated, except for the four most basic products (such as 3 percent liter bags of milk).

On the budget itself for the next year, Olmert told senior treasury staffers last week that he is committed to the 2006 state budget, despite its being drafted by Netanyahu. Olmert told the media that he considered the law that restricts the annual increase in government spending to only 1 percent as wrong.

Nevertheless in recent conversations with treasury staffers, Olmert said he had publicly committed himself to the 2006 budget.

From 2007 though, he added, the budget's composition would be reexamined.