Economic Arrangements Bill ready for final Knesset vote

Finance C'tee authorizes bill accompanying budget with dramatic tax, spending overhaul; opposition resorts to jokes to buy time.

By NIV ELIS, LAHAV HARKOV
Lapid at Finance C'tee meeting 370 (photo credit: Knesset)
Lapid at Finance C'tee meeting 370
(photo credit: Knesset)
The Economic Arrangements Bill is ready to be brought to second and third (final) votes next week, with the Knesset Finance Committee authorizing it on Thursday night after more than 24 nonconsecutive hours of voting.
The 2013-14 state budget the bill is to accompany must be passed in its final reading in the Knesset by the end of the month, or there will be an early election.
Prime Minister Binyamin Netanyahu agreed to take up changes made by the committee at Sunday’s cabinet meeting.
“Now the committee can move on to approving the budget itself,” Finance Committee chairman Nissan Slomiansky (Bayit Yehudi) said.
“We need to pass the budget. The government cannot continue functioning without a budget for almost an entire year.”
Among the changes to the recent, dramatic tax and spending overhaul agreed to on Wednesday was a slight reduction of middle class tax rates at the behest of the opposition.
The new text would reduce the tax increase for those earning between NIS 14,000 and NIS 22,000 a month from 1.5 percent to 1.4%.
While Finance Minister Yair Lapid originally proposed an across-the-board income tax increase of 1.5 percent, he and Slomianksy agreed to a more progressive tariff on Wednesday, in which taxes for those making under NIS 14,000 would increase 1%, and taxes for those making over NIS 22,000 would increase 2%.
The reduction in National Insurance Institute child allotments for youngsters born before June 1, 2003, will be moderated significantly.
While the plan had been to reduce allotments for all children to NIS 140 a month, the final bill settled on the first child receiving NIS 140 instead of the NIS 175 currently in place, the second receiving NIS 140 instead of NIS 263, the third receiving NIS 172.2 instead of NIS 295, the fourth receiving NIS 336 instead of NIS 459, and the fifth receiving NIS 354.2 instead of NIS 389.
Among the other measures approved were an increase in the corporate tax rate from 25% to 26.5% starting in 2014 and a cancellation of the proposed tax on housewives.
The Finance Committee also removed employment as a condition for discounts on property taxes, one of Lapid’s flagship budgetary innovations, which faced fierce opposition from haredi parties.
MKs unanimously agreed that the topic needs a deeper, longer discussion than it would get as part of Economic Arrangements Bill votes.
“We made history. We approved the Economic Arrangements Bill on time, while making significant changes,” Slomiansky said.
The Finance Committee met for more than 11 hours Thursday, and its Wednesday afternoon meeting lasted 14 hours, ending at 4 a.m. on Thursday, with the opposition using time-wasting tactics in hopes of catching the coalition off guard in votes.
For example, when the committee’s legal adviser announced the Economic Arrangement Bill’s name, Meretz chairwoman Zehava Gal-On submitted an objection, requesting that the bill be named “Laws that increase the burden on the middle class and weaker sectors.”
When her suggestion was voted down, she brought another name to a vote, “There is no future for the middle class,” a pun on the name of Lapid’s party, Yesh Atid, which means “There is a Future.”
Opposition parties asked for and were given a 15-minute break to discuss Gal- On’s proposal.
At several points, MKs were unable to contain their laughter at the banter between lawmakers, and the overnight meeting was held up yet again.
It took the committee nine hours to approve the bill’s name and purpose alone.