Finance Minister Yair Lapid faces formidable opposition from within the
coalition, as several ministers are threatening to vote against his new budget
which he submitted to the government Monday night, proposing to increase income
taxes by 1.5% starting in 2014 and boost 2013 spending by 7% in real
The proposal represents the largest budget increase of all the
“I will vote against the budget the way it looks now,”
Environmental Protection Minister Amir Peretz said. “I oppose cuts in child
benefits, increases in VAT and cuts in funding of daycare centers. This
budget hurts working mothers.”
He plans to propose differential VAT,
meaning a higher rate for luxury items and lower for necessities – in the next
ministerial meeting on the budget – saying it has the potential to help weaker
In a Knesset Economics Committee meeting, Tourism Minister
Uzi Landau spoke out against the planned cancellation of the exemption of
tourist industries from VAT.
“Tourism employs 200,000 people,” he said.
“Over 80 percent of tourism is incoming tourism, meaning that this is an export
There are investments of NIS 2 billion in the pipeline, and if
tourism is harmed, they will go to waste. We can jump from 3.5 million tourists
per year to 5 million within two years if we do the right
According to Landau, the fight against VAT on tourism “is for the
good of common sense and the working man.”
Pensioners’ Affairs Minister
Uri Orbach spoke out against slashing funds for his ministry, saying he “will
not abandon the elderly in the fights against Finance Ministry bureaucrats’
cruel budget cuts.”
Orbach pointed out that the cuts in services he
provides, like organizing volunteers for hospitals and nursing homes and
educating senior citizens about their rights, make life even worse for
pensioners when they’re compounded with general budget cuts and tax
The minister called for Bayit Yehudi to hold an emergency faction
meeting and vote against the budget.
Knesset Finance Committee chairman
Nissan Slomiansky, also of the Bayit Yehudi, voiced opposition to the budget as
well, saying it lands a harsh blow to the middle class.
“I expect my
friend Finance Minister Yair Lapid, who I value very much, to present new
directions [on the budget],” he said.
Slomiansky expressed hope that, as
someone new to politics, Lapid could give new ideas and not “the usual, banal
arguments we hear from the Finance Ministry.”
Deputy Minister Ofir Akunis
(Likud Beytenu) took to Facebook to say that “the Finance Ministry is generous
when it comes to slashing budgets, but not everything that was publicized today
will be authorized, and there is still a long road ahead.”
leader Shelly Yacimovich took a play out of Lapid and Prime Minister Binyamin
Netanyahu’s book, wielding a cartoon of a bomb at a press conference Tuesday
“I’m going to use this opportunity to speak in the only language
[Lapid] understands,” she said. “This is the bomb. This is the
“This is the red line,” she added, drawing one under the bomb.
“It’s before you make all these cuts. I don’t want to call this old politics,
because there were amazing politicians in the past. If this is new politics, I
don’t want it. This plan is evil and harmful.”
According to Yacimovich,
Lapid’s budget will bring a recession, because slowing down government spending
is reflected by consumers, and then businesses are harmed.
leader also criticized the Finance Ministry for not taxing large
“The treasury doesn’t dare touch the real sources of
wealth, even though the deficit comes from less income from taxes,” she
Yacimovich called Lapid “a copy of Netanyahu but more cruel and
“Lapid is moving the deficit from the government to our
pockets,” she said. “Look at these brutal cuts; they’re
Yacimovich mentioned that a quarter of Israelis are under
the poverty line, saying Lapid’s budget hurts them by raising VAT, canceling
daycare subsidies, and raising taxes on housewives.
“Did you check how
many people will drop below the poverty line because of your plan? I feel bad
for the poor. You took their bread from them. What will they do now? Eat
cake?” she quipped.
Also Tuesday, new MKs took a crash course on the
budget and the Economic Arrangements bill provided by Knesset Legal Adviser Eyal
“This is certainly one of the central topics on the Knesset’s
agenda,” Knesset Speaker Yuli Edelstein told the MKs.
“It’s clear that
the economic situation is not great. There is a need for a certain economic
policy at this time, but in a situation like this, we cannot let someone put in
things that don’t belong.”
Edelstein called for coalition and opposition
MKs to “stand guard” when dealing with the budget.