PM, coalition party leaders to discuss new periphery tax cuts amid protests

Gafni: Periphery benefit cuts still not final; Opposition accuses government of abandoning periphery, in light of plan to lower tax break for Western Galilee cities.

By LAHAV HARKOV
Updated: NOVEMBER 3, 2015 02:24
Protests against proposed changes to the criteria for periphery residents to receive tax benefits, October 2015. (photo credit: Courtesy)
Protests against proposed changes to the criteria for periphery residents to receive tax benefits, October 2015.
(photo credit: Courtesy)
Prime Minister Benjamin Netanyahu delayed changes to the criteria for periphery residents to receive tax breaks Monday, leading Western Galilee cities to call off their general strike.
The decision came on the second day of the strike, as protests raged outside the Knesset and the Prime Minister’s residence, after Netanyahu met with the heads of coalition parties and Knesset Finance Committee chairman Moshe Gafni (UTJ).
Netanyahu promised mayors that no changes will take place until after the state budget is passed, on November 20.
Likud mayors and party activists pressured MKs in recent days to cancel the planned change in criteria for tax cuts, which would have resulted in residents in some periphery areas with above-average salaries to have smaller reductions than in previous years.
Ofakim Mayor Itzik Danino demanded in a letter to Knesset Finance Committee Likud coalition whip MK Miki Zohar to outright cancel plans to change the criteria for benefits to residents of his town and others.
Soon after, Zohar told Finance Committee chairman Moshe Gafni that Likud lawmakers would oppose reducing any benefits to periphery towns.
In recent weeks, Gafni, with the support of Netanyahu, Finance Minister Moshe Kahlon and other coalition party leaders, proposed changing the system of tax cuts for peripheral areas, from one in which specific towns receive blanket benefits, to one in which benefits would be differential for residents based also on income criteria, following a High Court decision on the matter.
The new eligibility criteria would have increased the number of periphery towns and cities to receive tax breaks will increase from 192 to 407, and the budget for the expanded list would have gone up from NIS 850 million to NIS 1.2 billion.
Earlier Monday, Gafni explained: “Because we expanded the list of towns getting benefits by a lot, and despite the additional budgets [for the benefits], there is still a small minority of towns where people with a high income will be slightly harmed, and even that is something we are trying to solve in different ways.”
“Therefore, we will not vote until we exhaust the process and make sure the harm to them, if there is any, will be as small as possible.”
According to Gafni, 6.2 percent of the towns that used to receive the tax breaks would have had slightly lower benefits for residents who make NIS 16,700 or more.
“We can find solutions in terms of the criteria, but not in terms of the budget,” Gafni added. “The Finance Minister will not give more than the NIS 400m. addition to which he agreed...We are looking for solutions... We can increase a little, decrease a little, but not more,” Gafni said.
“In any case, the situation is much better than it was, and we will avoid a situation in which the High Court cancels [the benefit] for all the [periphery] towns.”
The Knesset Land of Israel Caucus, however, took issue with what they said was Gafni’s willingness to expand the benefits without extending them to more settlements.
MK Bezalel Smotrich (Bayit Yehudi) had advocated for 60 settlements considered under an increased security threat to be included, but coalition party leaders decided not to. There are already 28 West Bank towns that fall under the criteria.
Smotrich said at a meeting of the Land of Israel Caucus, which he co-chairs, that “it is important that towns in the north receive more benefits. We don’t only care about Judea and Samaria. However, it cannot be that the list is being reconsidered and Judea and Samaria are not being added. We cannot accept this injustice.”
MK Yoav Kisch (Likud), the caucus’ other chairman, said: “We support the periphery. We’re not advocating for Judea and Samaria to receive benefits instead of the periphery, but the minute the map is being changed, it’s a different matter."
“Those on the line of fire should get the benefits. We want justice and a fair division of resources,” Kisch said.
Meanwhile, Acre, Nahariya , Ma’alot-Tarshiha, Mateh Asher, Kfar Vradim and Mizra continued a strike by their local authorities, which began on Sunday, as did the Histadrut in the Western Galilee.
Opposition MKs joined residents of the Western Galilee and their supporters in demonstrating outside the Knesset and prime minister’s residence, carrying signs with messages like “No benefits, no Nahariya” and “Don’t cut off our oxygen.”
Opposition leader Isaac Herzog (Zionist Union), who attended the protest in Jerusalem, spoke at a Zionist Union faction meeting where he tied the lower tax cuts to Economy Minister Arye Deri’s resignation and the expansion of his second portfolio, Negev and Galilee, to include more of the periphery.
“The periphery does not need fictional government ministries and headlines with nice words. The Negev and Galilee needs budgets, development, and investment in workplaces,” Herzog said.
“This government is throwing the periphery off the benefits map, putting Kiryat Arba instead of Kiryat Shmona and Yizhar and Itamar instead of Ma’alot-Tarshiha. That’s worse than neglect; that’s abandonment.”
Ma’alot-Tarshiha Mayor Shlomo Bohbot said at the Zionist Union faction meeting that “Bayit Yehudi MKs don’t care about towns on the line of fire.
They are disconnected and only care about settlements. We are on strike for several days and the Education Minister didn’t call us or take an interest.”
Earlier, at the protest, MK Ayelet Nahmias-Verbin (Zionist Union) accused the government of “cynicism” and making “cosmetic changes that he can talk about in press conferences, but cutting all significant benefits for the periphery.”
MK Ksenia Svetlova (Zionist Union) said that the concept of a periphery shouldn’t exist, and that the government must make sure all towns are taken care of and not treat the Negev and Galilee like “stepchildren.”
Yesh Atid MK Haim Yellin, a resident of a kibbutz by the Gaza border, lamented that “the government promised a socioeconomic budget, all we see is a budget that tramples the citizens. The government has a responsibility to the Zionist citizens that are spread along Israel’s borders and work in agriculture and other not particularly profitable jobs.”
MK Meir Cohen (Yesh Atid), a former welfare minister and mayor of Dimona, said residents of the periphery are “true Zionists.”