It seems my earlier pessimism about the threatened value added tax (VAT) on fruits and vegetables was premature. For now, fruit and vegetables will remain tax-free commodities in Israel.

 Was it concern for our health or the state of Israeli agriculture that prompted this turn-around? Not exactly. The Byzantine ins and outs of coalition politics are what saved the day. The Shas religious party, a member of the governing coalition, decided to press the issue, and they refused to accept the offered compromise in which the tax would start low and gradually increase over several years. 

Why did they do it? Consensus among news analysts seems to be “because they could get away with it.” The narrower the majority held by the coalition in the Knesset and the more fragile it is, the easier it is for the smaller coalition parties to throw their weight around and make demands that mainly benefit their constituencies.

And, although Shas paints itself as a human welfare party, in practice it promotes legislation and policies aimed at helping its “ideal voters”: lower income families with lots of children. Issues they have pushed through the government have included holding on to an outdated system of universal child allowances and limiting mandatory return deposits on plastic drink bottles to those under 1½ liters. (The rationale for this, if I understood it correctly, is that large families buy larger bottles of soft drinks, and large, religious families are, for some reason, harder pressed than others to bring back bottles for recycling.)

 In the case of fruits and vegetables, then, taxing their sale would hit those large, low income families especially hard (a conclusion it’s hard fault).     

Lurking in the background is another constituency: fruit and vegetable sellers in the open markets – the shuks. As in open markets everywhere, shuk produce is weighed on mechanical scales and the amounts totaled in the seller’s head. At present, no sales record exists at the end of the day for tax purposes. In addition, shuk vendors rely on low prices and high turnover to make a profit on their produce. A 15.5% price hike could clearly harm business. But just as American candidates must be seen wearing hard hats in industrial plants and eating hamburgers in diners, Israeli candidates go to the shuk to shake hands, eat bourekas and bananas, and give a few minutes to the opinions of the “common folk” vendors and shoppers. Conventional wisdom holds that the shuk favors Likud party candidates like Prime Minister Netanyahu. Could he risk having the bananas thrown at him, rather than offered on a plate, the next time he sauntered through the shuk?

Does it really matter whether the final outcome is the result of enlightened decision making or messy politics? Yesterday in the Jerusalem shuk there were celebrations, and it seems that, for now, Netanyahu has been forgiven (or at least, his blunder will be forgotten by the next elections) and his government is intact. 

Photo: Ze’ev Zamir