Forty-five hours of Knesset discussions and votes began on Tuesday afternoon
with Finance Minister Yair Lapid and Finance Committee chairman Nissan
Slomiansky defending the 2013-2014 budget from an onslaught of
“This is certainly a budget that changes priorities in the
market. I understand the opposition doesn’t like it, and that’s their right, but
it reflects what voters want and who they elected,” Lapid said.
continued to taunt the opposition: “You don’t really want to stand where I’m
standing, because it’s easier for you to sit there and criticize me. Tell me,
how would you cover the deficit, with checks you got as a wedding gift? You’re
in la-la-land, a fantasy land with no connection to reality!”
minister touted his budget as one that makes everyone carry the tax burden
equally and creates stability through fiscal discipline to encourage
“We’re moving from a culture of handouts to a culture of work.
Work is a Jewish and a social value,” he said.
Lapid promised the
opposition that in a year and a half, when the next budget is brought to a vote,
they will see that he was right and worked responsibly to cover the
Slomiansky presented the budget bill unenthusiastically, as a
product of compromise: “This does not represent Lapid’s ideology perfectly, nor
does it represent mine, but it’s the budget that is necessary now.”
Bayit Yehudi MK defended the finance minister and Yesh Atid chairman as a fast
“Lapid became finance minister even though he isn’t a
Nobel-winning economist, and had to quickly prepare a budget. That’s tough, but
that’s the reality in Israel,” Slomiansky said. “Lapid keeps learning and
learning. Once we close this deficit, he’ll prepare a budget better
reflecting our ideologies.”
The budget debate was scheduled to last nine
hours on Tuesday, 12 hours on Wednesday, and 24 hours beginning at 9
a.m. on Monday.
Following the bill’s presentation, the discussion
began with a speech by Meretz chairwoman Zehava Gal-On, who repeated several
times that the budget is cruel.
“This is a cruel neo-liberal budget that
hurts the weaker sectors and the middle class,” Gal-On said.
deepen poverty and increase social gaps.”
The Meretz leader lamented that
“big, strong corporations receive a gift from the government of NIS 30 billion,
and then dental care is cut.”
MK Ilan Gilon (Meretz) said that he
expected more from Lapid’s speech, calling it the “Lapidomator,” the name of a
website that generates fake Lapid quotes.
Labor MK Merav Michaeli mocked
the coalition as wearing “the emperor’s new clothes.”
“This budget is
screaming ‘The emperor is naked!’” she said. “The budget is a declaration of
values, and this one says, ‘My brothers, the working people, thanks for bringing
us to this point, now don’t look to me for help.’”
MK Eli Yishai (Shas) compared
the draft budget to the one passed when his party was in the coalition, saying
that his party protected child allotments and housing benefits.
a government of ministers who only know about poverty from polls or statistics,
so they blame the poor. These ministers were born with silver spoons in their
mouths and then explain that budget cuts help the weak. Some may believe that,
but I never did. When the government doesn’t help the poor, the economy does
badly,” Yishai said.
The budget discussed on Tuesday contained a slew of
changes from Lapid’s original May proposal, though the overall framework
remained the same.
While deficit targets of 4.65 percent for 2013 and 3%
for 2014 remained in place, overall spending increased from NIS 388.34b to NIS
395b for 2013, and fell from NIS 408.06b to NIS 405.27b for 2014.
Minister Binyamin Netanyahu intervened to scale back NIS 1b. of the NIS 4b. in
defense cuts originally planned for 2013, though the defense budget is
tentatively set to be NIS 3b. lower than Lapid’s original plan for 2014. The
cabinet on Sunday approved a 4% overall reduction in ministries’ spending,
including NIS 500 million cuts to those ministries whose budgets increased over
previous years, including education, transportation and welfare.
Knesset Finance Committee reached a compromise on National Insurance Institute
monthly child allotments, which were to be slashed to NIS 140 per child across
the board. Instead, they will now range from NIS 140 for each of a family’s
first two children to NIS 354 for a fifth child.
The plan to raise income
tax 1.5% across the board gave way to a progressive tax, distributing increases
of 1%, 1.4% and 2% across the income brackets, setting the highest rate at an
even 50%. Corporate tax will rise to 26.5%, 0.5% above the originally proposed
Changes in the tax code that would affect housewives and
recent graduates were eliminated, as was a tax for homeowners seeking to buy new
Other portions of the original proposal had already been
voted into law, including a 1% increase in value-added tax, bringing it to 18%;
additional taxes on cigarettes and beer and changes to hard-alcohol taxes. But
plans to eliminate the VAT exemption for tourists were nixed, as were fruit and
vegetable VAT exemptions.
Due to the budget’s late passage, changes in
the 2013 budget will have only a limited impact. For the first seven months of
the year, the government ran on monthly disbursements of 1/12 the 2012
allocations; what’s left will be distributed for use in the last five months of