Lapid budget plan keeps deficit target at 3%

Finance minister presents budget draft to Netanyahu, Fischer; says Israel moving from "culture of stipends to culture of work."

By GIL STERN STERN HOFFMAN
April 23, 2013 02:05
2 minute read.
Yesh Atid leader Yair Lapid at a faction meeting, February 18, 2013.

Lapid at faction meeting 370. (photo credit: Marc Israel Sellem/The Jerusalem Post)

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user experience almost completely free of ads
  • Access to our Premium Section
  • Content from the award-winning Jerusalem Report and our monthly magazine to learn Hebrew - Ivrit
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later Don't show it again

Finance Minister Yair Lapid submitted on Monday a 2013-2014 budget proposal to Prime Minister Binyamin Netanyahu and Bank of Israel Governor Stanley Fischer that ruled out an increase to the deficit target.

“We are carrying out a responsible, brave economic policy that will return the economy to the path of growth and assist in dealing with the economic challenges we face. We will lead the Israeli economy not just to economic growth, but also to growth in the home,” Lapid said, promising that the budget would focus on the working man as the central growth engine.

Be the first to know - Join our Facebook page.


Fischer, who had publicly pushed for maintaining the deficit target, praised the decision.

According to a report in Globes, Lapid’s budget proposal includes NIS 18 billion in budget cuts and NIS 5b.

in tax hikes. On the revenue side, value-added tax would reportedly rise one percentage point to 18% (bringing in NIS 4b.) as would income tax rates (NIS 3b.), sales tax (NIS 1b.) and corporate tax (NIS 700m.). The proposal would also reportedly eliminate tax exemptions from VAT on fruits and vegetables (NIS 2.2b.), advanced training funds (NIS 2.4b.), provident funds (NIS 2b.), betterment tax breaks (NIS 200m.)

and the VAT exemption in Eilat (NIS 600m.).

The Finance Ministry, however, would not confirm the reports, citing ongoing discussions.



Earlier reports that Lapid and Fischer compromised on a 0.25% increase to the deficit target proved incorrect.

Speaking at a Yesh Atid party meeting at the Knesset earlier in the day, Lapid promised the tough cuts would not prevent him from moving forward on helping the poor.

“We won’t hide behind this deficit,” he said, calling the budget a “budget of hope.”

“Empathy can’t replace policy. We need a strong middle class of working people who pay taxes and we can use these taxes to help those who lack. No child will remain hungry in Israel as long as we’re here. It’s part of our obligation,” Lapid continued.

Opposition Leader Shelly Yacimovich (Labor) vowed to defeat the budget, equating Lapid’s policies with those of Netanyahu.

“We have proven what the opposition can do,” she said, citing battles in previous weeks to cut funds for university students and reservists and head off a Bank Leumi deal to relieve investor Nochi Dankner’s Ganden company of NIS 150m. of debt.

“There will be a great burden on poor Ricki,” she said, in reference to the 37-year-old fictional character Lapid introduced to the public as a typical middle-class woman.

Meanwhile, Histadrut labor federation chairman Ofer Eini, fresh from a two-day airline strike, convened a meeting of labor leaders to discuss ways of heading off any cuts to wages or alterations to collective agreements.

Nissim Boublil, president of the Israel Builder’s Union, came out against reported cuts to infrastructure.

Speaking in the Knesset, Lapid poked fun at the outcry over the budget, noting that there had already been seven no-confidence motions over it, despite the fact that it had not yet been finalized nor even presented.

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS