Histadrut chairman Ofer Eini threatens industrial action if the government goes beyond the austerity measures approved yesterday and seeks to change the collective labor agreements already signed with the union. He made the remarks during a meeting of Histadrut officials.
Eini is apparently referring to comments made by officials in Jerusalem, including Ministry of Finance officials, that it was considering postponing the second minimum wage increase, scheduled for October, to raise the minimum wage from NIS 4,100 a month to NIS 4,300 a month. There have been reports that the Ministry of Finance wants to postpone the upcoming public sector wage hike, and that it will again try to cancel the tax exemption on advanced training funds.
"I have all kinds of pitter patter and remarks from all kinds of officials, but I have explicitly said, and I will stand by it - workers will receive all they deserve up to the last penny," said Eini. He added, "There appears to have been no thorough thinking behind the measures.
The Histadrut passed a "sense of the union" declaration against the government's austerity measures.
Eini announced that Histadrut economists will draw up within a few days a plan for a differential VAT, similar to the tax applied in many other countries. He believes that differential VAT would achieve the necessary tax revenues, while avoiding harming the poor, who spend most of their income on necessities.
Last week, Minister of Finance Yuval Steinitz said, "Differential VAT is a sick idea that destroys the tax system." He said that the only advantage of Israel's tax system is the uniform VAT rate, and that the IMF and OECD both agree.
The Histadrut counters that the Knesset has not yet approved the 1% VAT hike, and that the union will present an alternative plan to MKs. Eini said that a differential VAT would make it possible to lower VAT on food, while raising it on items such as new cars. Israel's purchase tax on cars is one of the highest in the world. Eini added that it would be better to raise the companies tax, at least for the sake of showing a "decent balance".
Eini is basically presenting a simple equation: so long as the government only raises taxes and makes across-the-board cuts to ministries' budgets, the Histadrut is unlikely, and may be unable, to do much, except for presenting a differential VAT plan, which no one in Jerusalem is likely to take seriously. But if the government seeks to harm public sector employees and minimum wage earners, which are clear grounds for declaring a labor dispute by law, the Histadrut will fight, to the point of declaring a general strike.
Published by Globes [online], Israel business news - www.globes-online.com - on July 31, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012