After years of price stability, this year Israel has been hit by inflation. While the annual inflation rate is lower than in Western states – 4 percent, compared to 8 percent – it is still a severe blow to retirees, people receiving government benefits and salaried employees who don’t receive cost-of-living adjustments.
To opposition leader, Benjamin Netanyahu, this is an opportunity to exploit the anger of many people whose standard of living has been affected in order to spread lies, and blame the rise in the cost of food, gasoline and housing on the Bennett-Lapid government.
But it’s Netanyahu himself who bears most of the responsibility. During his 12 years as prime minister, he failed to sufficiently increase the pace of housing starts; he did not force the Israel Land Authority to release enough land for construction into the market, so demand exceeded supply; and he did not act to reduce the time it takes to obtain building permits. The rise in prices is the result of his ongoing mismanagement. The Naftali Bennett-Yair Lapid government has actually increased the number of construction starts; the effects of this will soon be felt.
Netanyahu also bears responsibility for the rise in the prices of food and consumer goods. During the height of the coronavirus pandemic, he showered tens of billions of shekels on the economy, in order to increase his popularity, causing an enormous budget deficit in 2020 and a large one in 2021. This increased demand and put pressure on prices. Now, in the Bennett - Lapid government, the deficit is zero, and that pressure has disappeared.
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Netanyahu also knows the current government is not responsible for the rise in the prices. In 2021 the pandemic and the numerous resultant lockdowns around the world closed factories and caused shortages and price increases. Ocean freight shipping has also become more expensive, as have raw materials. The ebbing of the pandemic caused a global rise in demand, and the costs of raw materials have skyrocketed. In addition, traffic jams in shipping ports were created, and marine shipping prices rose eightfold. And then Russia invaded Ukraine, causing increases in the price of wheat, corn, barley, gasoline and coal. This in turn led to higher prices for food, electricity and goods.
The rise in prices is more painful in Israel than it is in Europe and the United States because the cost of living here is higher, and Netanyahu neglected the problem for years. He did not lower the high customs barriers on fruits and vegetables, dairy products, meat, poultry, eggs, fish, olive oil, honey and peanuts, nor the bureaucratic barriers set by the Standards Institute of Israel, and he left behind him an economy full of monopolies, cartels and exclusive importers.
In fact, the Bennett-Lapid government cut import tariffs on produce, reformed Israel’s egg industry and freed importers from the burden of the Standards Institute. But all of these facts do not prevent Netanyahu from spreading lies, since that’s his specialty. It’s a pity that he is doing so at the expense of Israel’s citizens.