Ministers threaten to vote against budget over cuts

Peretz, Landau, Orbach lament tax hikes, cut benefits; Yacimovich presents bomb drawing, says budget crossed red line.

Opposition leader Shelly Yacimovich presents her red line 37 (photo credit: marc israel sellem)
Opposition leader Shelly Yacimovich presents her red line 37
(photo credit: marc israel sellem)
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 terms.
The proposal represents the largest budget increase of all the OECD countries.
“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 populations.
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 industry.
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 thing.”
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 hikes.
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.”
Opposition 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 evening.
“I’m going to use this opportunity to speak in the only language [Lapid] understands,” she said. “This is the bomb. This is the fuse.”
“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.
The Labor leader also criticized the Finance Ministry for not taxing large corporations.
“The treasury doesn’t dare touch the real sources of wealth, even though the deficit comes from less income from taxes,” she stated.
Yacimovich called Lapid “a copy of Netanyahu but more cruel and more shameless.”
“Lapid is moving the deficit from the government to our pockets,” she said. “Look at these brutal cuts; they’re unbelievable.”
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 Yinon.
“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.