Analysis: 0% VAT - The making of a political storm in a teacup

Turbulence between Likud and Yesh Atid will continue, but the coalition will go on.

September 16, 2014 10:33
2 minute read.
Netanyahu and Lapid

Netanyahu and Lapid. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

Prime Minister Binyamin Netanyahu was busy Monday night with his quest to rebuild support inside his political base in the Likud Party. He took over a pre-Rosh Hashana toast for party activists in Petah Tikva that was organized by the three ministers closest to him – Defense Minister Moshe Ya’alon, Strategic Affairs Minister Yuval Steinitz and Transportation Minister Israel Katz – and made the event his own.

Netanyahu had his associates work overtime calling MKs and key party activists to make sure they came to this event or at least stay away from the Likud central committee meeting organized by his nemesis, the deputy defense minister he fired, Danny Danon.

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The prime minister had no idea that while he was busy dealing with his party, a Channel 10 report would shake his coalition. The report said he had ordered a freeze in legislating Finance Minister Yair Lapid’s signature plan for zero-percent VAT on housing for young couples.

The report was not completely accurate. It was his coalition chairman, Yariv Levin, who delayed dealing with the legislation in Knesset committees so it would be dealt with as part of deliberations on the 2015 state budget.

The procedural move was done without Netanyahu’s knowledge, though he had given Levin his blessing to handle legislating both the VAT plan and the budget as he saw fit. The leak to Channel 10 also came from Levin, and not from Netanyahu or his associates.

It is Levin’s job to keep all the parties in the coalition happy, but he has a personal agenda against Lapid’s Yesh Atid. Levin has said many times that he would prefer to have Shas and United Torah Judaism in the coalition instead.

Lapid was also busy Monday night. He had been on Channel 10 the night before and made an effort to calm the strain in the coalition. He even told Army Radio Monday morning that “there was no conflict” with Netanyahu and that the media had exaggerated purported tension.

Monday night he heard from the Channel 10 reporter that Netanyahu had frozen his plan. He thought the prime minister was taking revenge. After all, when Lapid first announced his zero-percent VAT plan last year, Netanyahu first heard about it from a TV news report and was annoyed.

A source in Yesh Atid said that if the freeze was indeed ordered by Netanyahu there would be grave ramifications for the coalition. The source reiterated statements made by Lapid in the past that he would topple the government if the plan did not pass.

But after the same Channel 10 broadcast a poll Monday morning showing that his Yesh Atid party would fall from 19 seats to eight, will Lapid initiate an election just because a bill’s deliberations in Knesset committees were postponed until after the holidays? The answer is obviously no.

A storm in a teacup was created and turbulence between Likud and Yesh Atid will continue, but the coalition will go on.

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