On Tuesday Hadash MK Dov Khenin referred to the newly released draft of the neo-liberal budget as “a war budget, against the people,” and suggested that it was likely to bring about the reemergence of the social justice protest movement.
Khenin stated that “instead of giving natural resources back to the people, instead of obligating tycoons to pay a fair tax rate, instead of cutting the costs of occupation and settlements, the government prefers to cut stipends for children, public services and workers’ rights.” He added that the government “may think that the social justice protest movement is behind us, but they will be surprised to find it in front of them.”

The proposal for the bi-annual budget includes cuts of NIS 6.5 billion (about $1.8 billion) in the government’s activity in 2013, and NIS 18 billion ($5 billion) cuts in 2014.  In addition to cuts to ministries’ budgets, the plan proposes tax hikes which will come into force immediately, and others which will be implemented in the beginning of 2014. The tax hikes are expected to increase the State’s income by NIS 4 billion ($1.2 billion) in 2013 and NIS 14 billion ($3.9 billion) in 2014.

MK Khenin during the May Day rally in Tel-Aviv, last week (Photo: Hadash)

According to the proposal, income tax will be raised by 1.5% as of 2014, value added tax will go up by 1% to a level of 18%, and taxes on cigarettes and alcohol will be raised. In addition, housewives will now be forced to pay for national insurance and health insurance. The proposal includes an immediate 1% cut in manpower in the Civil Service, and another 1% cut in early 2014. In addition, no new positions will be approved in the Civil Service until 2015, and as of that year the overtime budget will be slashed by 10%. The plan also includes a NIS 1.5 billion ($420 million) cut in the education budget every year and a reduction of close to NIS 2 billion ($560 million) a year in child benefits. The Transportation Ministry budget will be cut by NIS 1.2 billion by postponing ministry’s road building projects across the country.

The National Union of Israeli Students criticized Finance Minister Yair Lapid’s budget proposal, which plans on canceling tax credits for academics. “The decision is contrary to the official position of the finance minister, who put the working man in the heart of the upcoming year’s budget,” the students said in a statement.  Student Union Chairman Uri Reshtik added that “the finance minister promised just a month ago that he wouldn’t harm the students. We call on Lapid to not assist in this injustice.”

National Insurance Institute Director Prof. Shlomo Mor Yosef said in response to the planned budget cuts that “more than 40,000 families will be pushed below the poverty line, and many poor families will become even poorer. “The families below the poverty line barely survive as it is. With the planned cuts in child benefits, the increase in VAT and the removal of other welfare services, these families won’t survive,” he stressed.

Related:

               In the eve of May Day Histadrut postponed call for a general strike

               On new Netanyahu right wing and neo liberal coalition