Pension Funds and Minimum Wage Rise Protected, But is a Harsh Austerity Plan Underway?

The Histadrut successfully prevented the Ministry of Finance from slashing tax benefits on pension plans and from freezing the planned minimum wage increase for 2024. However, financial security is at risk for many more.

Driven by the economic challenges amidst the war, the Ministry of Finance had considered to reduce tax breaks for pension contributions and freeze the expected, minimum wage rise to 5,800 ILS, that is set to take place in April 2024. This move would have significantly hampered workers’ financial security, and their ability to save for retirement, raising concerns about long-term financial stability. However, Chairman Arnon Bar-David and the Histadrut leadership insisted that the ministry abandons these plans. its plan for pension tax cuts.

While this is no less than a victory for the workers, the severity of the economic situation was acknowledged by Bar David who also recognized the need for other adjustments.

Bar-David said: “We prevented harsh cuts for workers, while protecting savings. Israel is in a state of emergency and the Histadrut under my leadership will continue to show national responsibility, as it has done in recent years. The government also needs to rise to the occasion. If the Israeli government closes unnecessary offices, while canceling coalition funds, I will be willing to discuss making adjustments to the framework agreement.”

Earlier today Davar posted an article with thorough details of the Finance Ministry planned cuts and restructuring that is allegedly planned by the Ministry of Finance. “The Treasury is advancing massive cuts, layoffs, privatizations, and new taxes. According to a draft of the economic plan for the 2024 budget, the Treasury is planning one of the biggest economic changes in Israel in recent decades. The plan includes: cuts to welfare, healthcare, and assistance for new immigrants; A tax on cigarettes; Damage to programs for the Arab community; Privatization of government units; And the closure of the Chief Scientist’s units.”

The major cuts and restructuring that Davar exposed remain major concerns for the workers of Israel, their capacity to earn a decent living, and their capacity to receive quality social services for health, welfare and wellbeing needs that have been significantly exacerbated directly and indirectly due to the war.