Lapid: Welfare doesn’t end poverty, work does

Finance minister defends budget cuts, responds to OECD report.

Tel aviv budget protest crowd 370 (photo credit: Camilla Schick)
Tel aviv budget protest crowd 370
(photo credit: Camilla Schick)
The answer to poverty is work, not government welfare support, Finance Minister Yair Lapid said on Thursday.
Responding to an OECD report that pegged Israel’s poverty level in 2010 as the highest among developed countries, Lapid told Israel Radio, “Allowances don’t take people out of poverty, they keep people in poverty. Work brings people out of poverty.”
Lapid pointed out that in Israel, two groups contributed to overall poverty more than any others: the ultra-Orthodox and the Arabs.
“It is already sad that there are groups that are predefined as poor,” he said, arguing that his 2013-2014 state budget and upcoming reforms would push those populations into the workforce in greater numbers.
The interview was one of a handful Lapid gave on Thursday on the heels of a drop in his Yesh Atid party’s standing in the polls. Since the release of his draft 2013- 2014 budget, Lapid has faced accusations that he broke campaign promises amid popular discontent over reduced child allotments and increased income taxes. Following the media blitz, Lapid planned a live question-and-answer session on Facebook late on Thursday night to communicate with members of the public and address their concerns directly.
Lapid said the polls were actually a sign of faith in his party.
“There were two polls this week. In one I lost two mandates and in the other I lost three [from the 19 Knesset seats his party garnered in January’s election]. If this is the hardest political fall, if that’s all I lost, then we learned something: that all the people who thought that Yesh Atid was a trend party see that it is something solid,” he told Army Radio.
While expressing empathy at popular anger toward his fiscal policy, Lapid also dismissed his critics, who he said “simply don’t know the details. In a year, they’ll say thank God there was a responsible hand at the wheel.”
“For example, I’m not harming the middle class, I’m helping the middle class,” he said.
While it’s true that Ricky Cohen – the fictional embodiment of a middleclass woman Lapid introduced into the national conversation earlier in the year – would have nearly NIS 300 less in take-home pay each month, Lapid argued that money was being invested in a better future.
“Part of protecting and defending the middle class means ensuring that the Israeli economy and all the social services don’t collapse around it,” he told Army Radio later in the morning.
The budget, he said, avoided cuts on the disabled, Holocaust survivors and retirees, while the income tax increase didn’t affect those making under NIS 5,000 a month. But more than anything, Lapid maintained that the real engines of growth would come in a series of upcoming reforms, not from the budget.
Speaking after Lapid on Israel Radio, National Insurance Institute director-general Shlomo Mor-Yosef said the poverty problem was more widespread than Lapid made it out to be.
“It’s not just people who don’t work,” he said. “Working people are also under the poverty line.”
Defending his recent agreement with Histadrut labor federation chairman Ofer Eini, Lapid said that a negotiated agreement was best for all sides. The Histadrut, he said, gave up NIS 1.5 billion for the budget, and the agreement allowed the country to avert a costly strike.
One week of striking, he said, would cause enough damage to necessitate a doubling of the tax increases he had proposed.
“You can declare a war that will get a week of headlines but won’t net the state a dime,” Lapid said.