Itongadol.- Finance Minister Yair Lapid on Thursday presented Prime Minister Binyamin Netanyahu with his outline for the 2013-2014 budgets, which included billions of shekels worth of cuts to projected spending and new taxes.
Though the budget plan was not made public, it reportedly included sharp cuts in child allowances, government wages and defense, plus a 1% increase in value added tax.
According to Calcalist, the budget outline included NIS 14b. in cuts to 2013 and an addition NIS 6b. of cuts for 2014, and NIS 6b. in additional tax revenues in both years. Those cuts include NIS 4b.-5b. from civil service spending, NIS 3b.-4b. from defense, an equal amount from child allowances, and NIS 2b.-4b. in infrastructure spending.
Yet a spokesperson for Lapid would only disclose that the budgetary framework included new taxes on luxury cars, luxury apartments and other luxury goods.
Opposition Leader Shelly Yacimovich dismissed the luxury taxes, saying, “the ridiculous, populist attempt to sell to the Israeli public that the solution to a deep deficit will come from taxing luxury cars is simply an insult to the intelligence of the nation’s citizens.”
She also accused Lapid of trying to cover up the damage his budget would cause the middle class and workers. “The upcoming meetings between the finance minister and prime minister are completely extraneous, as Netanyahu wrote the program himself and already authorized it exactly, even before the elections,” she said. Lapid and Netanyahu were scheduled to continue their meeting on Sunday.
The days leading up to the meeting were politically tumultuous for Lapid.
A late-night meeting between Lapid and Histadrut Labor Federation Chairman Ofer Eini on Wednesday night, in which Lapid tried to rally support for lowering wages in the public sector, ended without agreement.
The same day, Transportation Minister Yisrael Katz spoke out against alleged delays to infrastructure projects such as building railway lines and road projects, saying they would harm economic growth.
On Tuesday, Yacimovich blasted Lapid over rumors that he planned education cuts that would raise tuition by 20%, rumors he denied in a post on Facebook.
And Lapid himself sent out a statement Monday night, unprompted, announcing that he had saved women from enduring a half-point tax benefit cut worth NIS 109.5 a month, which costs the government NIS 700m. a year.
Meretz chairwoman Zehava Gal-On praised Lapid\’s proposed taxes as a welcome step, but agreed they were not enough. "If Lapid wants to prove that he will take the money to cover the deficit from the wealthy, he can\’t settle for taxing their cars," she said. "The big money Lapid is looking for is in tax exemptions enjoyed by a handful of huge companies and the aggressive tax planning of tycoons and capitalists."