Smotrich asks Histadrut to save him billions, but offers gesture

Finance Minister Bezalel Smotrich and Histadrut Chairman Arnon Bar-David met today to discuss the Finance Ministry’s plans for the 2025 budget, some of which conflict with the interests of the labor organization and will require its approval. The main point raised is the Finance Ministry’s intention to save NIS 8 billion by freezing the wage increase that public sector workers are scheduled to receive in the coming months. In addition, the Finance Ministry is seeking to freeze the minimum wage component of public sector workers’ wages, and to suspend the revision of tax brackets, which will affect all workers.

In an attempt to calm the opposition, Smotrich came to today’s meeting with confidence-building measures. Bar-David was told at the meeting that the Finance Ministry’s official budget proposal to the government would include a plan to close non-essential government ministries. Such a move would not prevent the erosion of workers’ salaries, but it echoes statements made by the Histadrut chairman.

In the first months of the war, the Histadrut agreed to accept a program that required every worker to “contribute” a day’s pay, equivalent to hundreds of shekels per worker, to fund the budget for recruiting reserve soldiers. The organization later made it clear that it would not accept further such measures until the government sharply cut spending on the coalition parties’ programs and closed non-essential ministries. Smotrich’s idea is to close five ministries, one for each coalition party.

Fire Extinguishing

Smotrich’s insistence and ability to get his coalition partners to agree to close the ministries awaits evidence. But this appears to be a change in policy by the finance minister, who has so far refused to adopt the recommendations of professionals in his ministry to close the ministries. Dismantling the offices of ministers and deputy ministers will not save significant sums in the context of the state budget, but it will at least instill a sense of responsibility on the part of the leadership, at a time when Smotrich is calling on workers to help and share in the heavy costs of the war through tax measures and spending cuts.

In the meeting with the Histadrut, Smotrich and his aides presented the plans, but the discussion did not go into details. It was agreed to continue the dialogue between the two sides, and to study all aspects of the budget.

Two weeks ago, tensions arose between Smotrich and Bar-David over a general strike declared by the Histadrut chairman in support of demands for a deal to release Israeli hostages held by Hamas in the Gaza Strip. Smotrich obtained a court order to end the strike, and accused Bar-David of “fulfilling Sinwar’s dream.”

Now Smotrich is trying to put out the fire, harnessing Bar-David to efforts to save billions of shekels in public spending. A statement issued by Smotrich after the meeting said: “The meeting took place in a good atmosphere and the two agreed to work together responsibly, out of recognition of the challenges facing the State of Israel and for the sake of Israel’s economy, the interests of workers, and the interests of all citizens of Israel. The meeting was held in light of the progress made in building the 2025 budget, and was part of a series of discussions held by the finance minister with all players in the economy.”

This article was published in Globes, Israeli Business News – en.globes.co.il – on September 12, 2024.

© Copyright Globes Publisher Itonut (1983) Ltd., 2024.