Finance Minister Yair Lapid..
(photo credit: REUTERS)
Prime Minister Binyamin Netanyahu on Wednesday warned against increasing the deficit in an apparent reference to Finance Minister Yair Lapid’s plans for the 2015 budget after the two postponed a meeting on the issue until Sunday.
“We must increase the security budget due to Operation Protective Edge and guard the economy, and these items meet in the deficit which we can control and which will not topple us. This will be our policy and thus we will act, together,” Netanyahu stated.
Speaking at the launch event for the new NIS 50 bill with Bank of Israel Governor Karnit Flug, Netanyahu said that “in order for this note to retain its value, we must guard both security and the economy,” and expressed appreciation for the Bank of Israel’s “seriousness and professionalism... in maintaining the stability of the Israeli economy.”
The comments could have been a dig at Lapid, who has been at loggerheads with Flug and Netanyahu over the 2015 budget and deficit, as Lapid promised not to raise taxes, but also to pass his 0% VAT plan for young couples buying a first home.
Lapid and Netanyahu postponed their meeting on the budget that had been set for Wednesday after a meeting on Monday in which the two did not make progress on the issue and after a planned ministerial session about the budget was canceled last Thursday.
The series of cancellations and postponements indicate a looming crisis over the budget, which, according to schedule, should pass its first vote in the Knesset in late October.
“If someone thinks that I’m going to pass a budget that screws the middle class again, in the service of diplomatic paralysis, then he apparently does not understand why I entered politics,” Lapid said at a conference on Monday.
Last week, however, Flug said that increasing the deficit without raising taxes will “expose Israel’s economy to dangers.”
Still, at the NIS 50 bill launch, Flug took a diplomatic tone and said it is natural for budgetary decisions to be made slowly.
“I hope the budget will pass and we won’t have to have a provisional budget [a monthly budget of 1/12 of the previous year’s budget], but we have a lot of experience and have done so many times, so we can work with that if we have to,” she said.
Flug added that the prime minister and finance minister listen to her advice, and that now is the time to wait.