Opinion |

Israeli Politicians’ Phony Promises About the Cost of Living

Sami Peretz
Sami Peretz
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Finance Minister Moshe Kahlon.
Finance Minister Moshe Kahlon.Credit: Alex Kolomoisky
Sami Peretz
Sami Peretz

The cost of living is a terrific subject, one that appeals to a wide audience. Who doesn’t suffer from the cost of living? Everything is expensive in Israel. A car, gasoline, the supermarket. Not to mention the crazy prices at restaurants and hotels. Or the cost of apartments.

Go ahead and talk about the cost of living. It will attract people – especially now that Israelis are traveling abroad so much and seeing how cheap things are there. This is the tip that political consultants are giving their clients these days; the cost of living is really a fantastic issue to talk about.

Prices in Israel are 20 to 25 percent higher than the average for countries in the OECD, which is why so many politicians are seizing on the cost-of-living narrative and portraying themselves as the ones who will finally do something about it.

>> Read more: Things in Israel are expensive, so why are we still spending like crazy? | Analysis

When he was communications minister, Finance Minister Moshe Kahlon made a career out of it with his reform of the cellular telephony industry, but he failed when it came to housing and returned to Likud. Health Minister Yaakov Litzman did it with free dental care for children.

Now Ehud Barak and Naftali Bennett are trying this tack too. Barak promises to cut the cost of living 20 percent, mainly by lowering the price of land and natural gas, and Bennett has made the cost of living a key campaign issue for his Hayamin Hehadash party; he promises to fight all the powerful forces in the economy – the tycoons, the big workers’ committees, the ultra-Orthodox rabbinic establishment.

Is this what they’ll work on the day after the election? Not very likely. For Barak, it’s clearly just a slogan. He has never dealt with cost-of-living issues. And they certainly don’t interest him personally, given his affluence. His fondness for billionaires, the good life and his future potential earnings have made him detached from the daily lives of most Israelis.

Bennett has more experience; he dealt with cost-of-living issues when he was economy minister, though he didn’t chalk up any great achievements. There was a moment when he declared war on the Chief Rabbinate’s monopolistic power on the issue of kashrut – which raises food prices – but was rebuffed and soon abandoned it. This past week he gave up the No. 1 spot in his party to Ayelet Shaked, who has shown no interest in fighting the tycoons and rising prices.

After Bennett’s speeches about the cost of living, one might have expected him to visit a supermarket, a car importing agency or the coffee stands at the airport and tell us how he intends to lower prices. But the day after his bold statement, he and his new boss toured the Gush Etzion settlement bloc with people from right-wing group Regavim and issued a warning against the Palestinian Authority taking over parts of the West Bank’s Area C via illegal construction and agriculture.

What does this have to do with the cost of living and what’s weighing on most Israelis? It has nothing to do with the cost of living, except for illustrating the direction that Hayamin Hehadash will follow – to the right of Netanyahu – and the party’s priorities under Shaked.

“Lowering the cost of living” remains an empty campaign slogan, a promise that people like to make and like to hear, but when broken down into concrete measures entails taking on all the major pressure groups in Israel: hotel chains, contractors, industrialists, farmers, workers’ committees, tycoons, importers, the Chief Rabbinate and above them all, the government that raises the cost of living with bureaucracy, taxes and the mediocre management of public resources.

In the eight years since the social justice protests in the summer of 2011, we’ve learned that lowering the cost of living is perhaps the toughest economic mission in Israel. After all, wherever prices are high, someone is benefiting greatly. And that someone usually also enjoys some kind of monopolistic or political power, and benefits from the asymmetry regarding information. And this also makes the government end up doing nothing even when it dearly wants to lower the cost of living.

Anyone who wants to lower the cost of living in Israel must tell voters how he or she will do it, and whose pocket will take a hit as a result. The only thing here that doesn’t cost a thing is empty promises.



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