Bennett Unveils Economic Package to Ease 'Impossible' Cost of Living Crisis

The measures from Israel's prime minister include cutting customs on several essential goods, tax benefits for the working- and middle-class and electricity subsidies

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Foreign Minister Yair Lapid, Prime Minister Naftali Bennett and Finance Minister Avigdor Lieberman at the press conference on Wednesday.
Foreign Minister Yair Lapid, Prime Minister Naftali Bennett and Finance Minister Avigdor Lieberman at the press conference on Wednesday.Credit: Ohad Zwigenberg

Bennett introduced Wednesday an economic package worth 4.4 billion shekels ($1.37 billion) to tackle the cost of living crisis in Israel, vowing to uphold “a new contract between working families and the state.”

Speaking at a press conference, Bennett unveiled a series of measures to confront the crisis, including electricity subsidies and tax credits.

The press conference was held alongside Foreign Minister Yair Lapid, Finance Minister Avigdor Lieberman and Economy and Industry Minister Orna Barbivai.

The headline policy will give families a 223 shekel tax reduction per child aged between 6 and 12, meaning that a family with two working parents and three children will save over 1,300 shekels per month.

Although noting that inflation is comparatively low in Israel, Bennett said that prices at supermarkets have reached an “impossible” level.

In order to combat the rise in prices, the prime minister announced that it will scrap customs duty on meat, fish, flour, olive oil, eggs and kitchenware.

Moreover, Israelis who do not reach the minimum threshold of income tax in Israel, comprising 300,000 people, will receive 800 shekels per month from July through a negative income tax.

The prime minister also vowed to strengthen Israel's Competition Authority in a bid to increase competition to drive down prices.

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