Lapid: I won't let Israel become Cyprus or Greece

Finance minister vows to ensure the middle class will cease carrying the burden of budget cuts on its shoulders.

Yair Lapid 370 (photo credit: Marc Israel Sellem/The Jerusalem Post)
Yair Lapid 370
(photo credit: Marc Israel Sellem/The Jerusalem Post)
Solving the country’s budget problems, though painful at first, would ultimately benefit the middle class, Finance Minister Yair Lapid promised on Monday, after a week-long silence.
Meanwhile, opposition MKs accused Lapid of detachment and alienation from the real middle class.
“I’m not prepared for us to turn into Greece or Cyprus on my watch,” Lapid wrote in a lengthy Facebook post, saying that covering the country’s NIS 30 billion “overdraft” would require difficult choices.
“On the other hand, if we don’t preserve the middle class, the economy will stop and the overdraft will grow more and more. That’s also the truth and that will also not happen on my watch,” he continued.
Though the 2013 budget deficit is projected at NIS 30b., Lapid does not have to eliminate the whole thing to meet the 3 percent deficit target; he needs only to reduce it by about NIS 19b. Of that, about NIS 13b. must come from cuts, but the rest can be a combination of reduced spending and increased revenues.
“The beginning may be difficult, but with time, the people who hold the whole nation on their backs will discover that they are no longer the ATM that the state goes to every time there’s a problem,” he wrote.
In his Facebook post, Lapid described one 37-year-old Ricki Cohen, a prototypical Israeli middle class woman whose economic situation the Finance Ministry should work to improve. Mrs. Cohen, of Hadera, and her husband, a low-level employee at a hi-tech company, earn a combined NIS 20,000 a month to support their three children.
“We sit here day after day talking about balancing the budget, but our job isn’t to balance Excel spreadsheets, rather it’s to help Mrs. Cohen,” Lapid wrote. “It’s because of people like her that this nation exists.”
Lapid said that the state should consider the education it provides Mrs. Cohen’s children (which he said should include longer school days), the quality of services at government offices, ineffective police and lack of competition in the financial sector. He lamented the health system he said was crumbling, the lack of a unified public transportation payment system and the fact the Cohen children were considering whether they even wanted to live in Israel when they grew up.
Though the Cohens have an apartment and travel abroad every other year, Lapid said, they would not be able to afford buying an apartment for one of their kids when they grew up.
The Finance Ministry should work to increase Mrs. Cohen’s quality of life and reduce her cost of living, he continued.
According to a 2012 Bank of Israel report, prices of goods and services such as housing, food, electricity, gas, and water increased faster than income for the middle class between 2007 and 2010.
Labor faction chairman Isaac Herzog accused Lapid of overshooting in his estimation of the middle class’s income.
“There are many more Mrs. Cohens who make only NIS 5,000 and together with their husbands bring in maybe NIS 10,000. They do not contribute any less to the country, send their children to the army and barely survive,” Herzog said.
“Wake up, finance minister. This is where the middle class is found,” he said.
According to Herzog, Lapid will take away child allotments (paid monthly by the National Insurance Institute), which balance middle class families’ incomes.
The Bank of Israel defines the middle class as those earning 75-125% of median income. A study in late 2012 calculated the medium income at NIS 6,655 per month, meaning a two-income family making more than NIS 16,638, as the Cohens do, would be solidly in upper middle class territory, defined as 125%- 200% of medium income.
Meretz chairwoman Zehava Gal-On mocked Lapid for “not yet understanding that he is no longer a columnist in Yediot Aharonot and that his job isn’t about writing long posts on Facebook.”
“The finance minister still has no idea whothe Israeli middle class is,” Gal-On said, adding that those who make NIS 20,000 are in the top 20%, financially.
“In this miserable Facebook post, Lapid showed his ignorance and condescension over the middle class, and even over the Finance Ministry economists, whom he described as surprised [to hear about Mrs. Cohen],” she added.
“Worst of all, he didn’t say one world about priorities or the weaker sectors or even the lower 80% [of earners], who will be the first to pay the price of the finance minister’s alienation and condescension.”
MK Esawi Freige, also of Meretz, weighed in as well.
“I feel sorry for Lapid voters who are in in the middle class and woke up to the finance minister’s Facebook status this morning,” he said.
“Lapid made it clear who he’s working for today: The top 20% of wealthy people in Israel society. Not for an imaginary Mrs. Cohen in Hadera, but for Mrs. Levy in Ramat Hasharon and Mrs. Berkowitz in Ramat Aviv.
Apparently, an income of NIS 20,000 isn’t a lot of money for Yair Lapid and his millionaire friends.”
Freige said a family making NIS 20,000 is not in the middle class, because NIS 10,000 after taxes is the average monthly income for an Israeli family, and most workers earn up to NIS 6,000 per month.
“These are Mr. Mahmid from Umm el-Fahm and Mrs. Attias from Beersheba. They are bearing the country on their shoulders and collapsing under the weight. They pay taxes, their children don’t have a chance of buying a home, and they are afraid of the future,” Freige added.
The Meretz MK called for Lapid to “get out of his bubble” and meet people from different population groups, as opposed to just his “rich friends from north Tel Aviv.”
Shas MK Eli Yishai responded to Lapid's post with a sarcastic statement congratulating him for managing to eradicate the issue of poverty, within two weeks of his appointment, in order to deal with the up-and-coming needy populations, namely those earning NIS 20,000 a month.
For those millions of people, who constitute populations that do not earn this kind of money, Yishai said, "they will not be ignored, allowing a blind eye to be turned against them, without a solution to the problem - this will only worsen it."
United Torah Judaism MK Moshe Gafni said “Israel received a finance minister detached from the holiness of the holiday – which he desecrated by posting a message during the holiday – and from his need to take care of the entire public.”
“Lapid should learn more about his job before releasing empty slogans,” Gafni added.