Backlash against high cost of living prompts Netanyahu to establish new ministerial committee

Following the passing of Israel’s two-year state budget last week, Prime Minister Benjamin Netanyahu announced on Sunday that he would create a committee to tackle the increase in the cost of living.

During his weekly Cabinet meeting on Sunday, Netanyahu said passing the budget was “important for economic stability and the fight against the cost of living.”

Netanyahu, himself, would reportedly be the head of the new committee, along with Finance Minister Bezalel Smotrich, members of the Ministry of Economy and Industry, as well as other ministers and professionals.

The prime minister said he instructed the Cabinet secretary to submit a draft for the establishment of “a ministerial committee” to handle issues related to the rise in prices across the nation, although he did not specify what powers the committee would have to tackle the problem, nor did he detail any steps beyond the creation of the council.

He called for the committee draft plan to be submitted by the next Cabinet meeting, saying, “the fight against the cost of living tops our government's list of national priorities.”

Inflation and the increase in living costs have been a significant concern for a large number of Israelis. Some believe Netanyahu’s government has neglected its campaign promise to address the issue.

Veteran Likud party lawmaker David Bitan, who heads the Knesset Economic Committee, blasted his own government last month for failing to address the high cost of living.

Food prices have risen noticeably in recent years and just yesterday, international food giant Unilever, announced it will be raising prices for many of its products again in July, according to Israel’s Channel 12 news.

The Israel’s Price Control Committee, which is part of the Finance Ministry, recently announced that it would allow an increase in prices of some basic items.

One of the country’s main food importers, Diplomat, reportedly announced price increases of up to 25% on some of its basic products.

Because Israel is not a true free-market economy, the price of some food items are regulated by the government, such as basic staples like bread and milk. In the last couple weeks, Israel has seen a rise in both dairy and bread prices.

In 2011, an increase in the price of cottage cheese in Israel led to a consumer boycott of the product. That boycott was soon followed by protests over the rising cost of living, including the lack of affordable housing.

Recent interest rate hikes have caused mortgage rates to rise, which has become a concern for many Israelis as well.

With  judicial reform protesters gathering across the Jewish state for 21 weeks, any additional protests against the cost of living would increase pressure on Netanyahu and his coalition.