Israeli Parties' Plans to Combat Cost of Living Analyzed
Translated & summarized from N12 by baba
Israeli political parties have presented various plans to tackle the country's high cost of living, which is reportedly 34% higher than the OECD average. Parties like Yashar, Be Together, Yisrael Beiteinu, The Democrats, and Religious Zionism propose measures such as opening markets to competition, regulating monopolies, and easing import barriers. Experts have analyzed these proposals, assessing their feasibility and potential impact, with some parties offering more detailed plans and numerical targets than others. Parties like Likud and Shas did not provide direct responses, with their actions in previous governments and limited initiatives being analyzed instead.
The story in 6 lines · by baba
- Israeli living costs are 34% higher than the OECD average, with food being a significant expense.
- Parties propose diverse solutions including market competition, import easing, and monopoly regulation.
- Experts question the feasibility and consumer impact of many party proposals.
- Yashar suggests opening distribution infrastructure and agricultural support reforms.
- The Democrats propose dismantling market concentration and increasing public investment.
- Shas's main initiative is food cards, seen as aid rather than a price reform.
Israeli citizens face significantly higher prices for basic goods and services compared to other OECD countries, with the cost of living reportedly 34% higher according to the Israel Democracy Institute. Food alone constitutes 17% of the average household's consumption basket, a figure that rises for lower-income families. As elections approach, political parties are presenting their strategies to address this issue, though experts from think tanks like the Israel Democracy Institute, Berl Katznelson Foundation, and the Arlozorov Forum have analyzed these plans for their feasibility and potential impact on consumers.
Parties like Yashar propose opening large companies' cold storage and distribution facilities to smaller players, fostering parallel imports, and transitioning agricultural support from tariffs to investment-based subsidies. Experts view their focus on underlying infrastructure as a strength, aligning with OECD recommendations, though some note a lack of specific numerical targets for price reduction.
The Likud party, which refused to answer the questionnaire, oversaw an increase in VAT to 18% during its tenure, a move that experts say offset some potential consumer benefits from import reforms. While continuing competition and import reforms based on European standards, the effectiveness of savings reaching consumers in a concentrated market remains uncertain.
"Be Together" aims to combat market concentration and monopolies, strengthen local agriculture, and open markets to imports and kosher certification. They plan to focus on product categories with significant price gaps compared to the world, such as dairy, toiletries, and packaged foods. Experts praise their structural approach but highlight the need for a long-term agricultural framework and clear numerical targets.
Yisrael Beiteinu proposes opening the market to competition, removing regulatory barriers, and expanding imports. Their plan includes reducing tariffs, eliminating exclusive importer status, and offering free public transportation for pensioners and reduced costs for young people. Experts acknowledge the credibility of the party's chairman due to his past experience but question the funding sources for public transport initiatives and the potential impact on local agriculture.
The Democrats suggest dismantling market concentration by requiring large suppliers and retailers to share data and limiting single chains' market share. They also propose defining "excessive price" in law and increasing public investment in health and education to reduce private spending. Experts note this is the only party to set a mandatory tracking mechanism, though they caution against the radical nature of conglomerate dismantling and question funding for the second phase of their plan.
Shas did not respond to the questionnaire. Their notable action was the allocation of approximately NIS 257 million for food cards in the 2025 coalition funds. Experts consider this targeted aid rather than a reform to lower prices, noting it increases purchasing power but doesn't address market concentration or prices themselves. The increase in VAT is also seen as partially offsetting the benefit.
The Joint List advocates for defining a basic living basket with price controls, aggressive enforcement against food monopolies, and raising the minimum wage. Experts criticize their neglect of imports as a price reduction alternative and warn that price controls could harm supply. They suggest the enforcement against monopolies is close to preferred alternatives but lacks detail.
Otzma Yehudit believes the solution lies in increasing competition and supply through easier business establishment and reduced regulation, rather than broad price controls. Experts agree that facilitating business is beneficial but note the party's proposals remain at a principled level without specific product focus or quantifiable consumer impact.
Religious Zionism proposes limiting the market share of dominant players, examining mandatory sales of brands by companies with significant market power, and easing import barriers. Experts commend their focus on market power beyond just import barriers but note the proposals are presented as options for review and lack specific numerical targets for price reduction.
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