While Prime Minister Benjamin Netanyahu presents his free education for preschoolers as his signature reform during the past four years, he intends to abolish it in his next term, according to the 2013 budget proposal, which Labor Party chairwoman MK Shelly Yachimovich revealed today.
At a press conference in Tel Aviv today, when the 2013 state budget should have come into effect, Yachimovich presented the austerity measures that are planned for the budget. They include a 5% across-the-board cut to ministries' budgets, including the Ministry of Education, which will force it to cancel free education for preschoolers, a 50% hike in university and college tuition, and a 25% cut in the Ministry of Social Services' budget, including cuts to old-age homes and hostels for autistic people.
Figures presented by Yachimovich also indicate that Netanyahu plans to raise VAT to 18%, raise the excise on diesel and gasoline by NIS 0.50 per liter, and raise the companies tax rate, but only on small and mid-sized businesses, to 30%. At the same time, the prime minister and Ministry of Finance intend to grant tax exemptions to big companies, further cut the tax rate for the top 1%, and keep the royalties rate on income from natural resources at 5%.
Welfare payments will also be cut: the children's allowance, Holocaust survivors' allowance and disability pensions will be cut by 5%. Eligibility for old-age pensions will be raised and the retirement age for women will be raised to 67, maternity leave will be shorted by two weeks to twelve, unemployment insurance will be reduced and will be capped at 50% of the person's average daily pay when he or she was working. The basket of healthcare services, equalization grants to local authorities will be reduced, social projects and subsidies for daycare and firefighting will all be slashed by 20%, and participation for a doctor's visit will be raised 50%.
Despite public sector wage agreements, salaries of teachers, firefighters, social workers, psychologists, police officers, doctors, and nurses will be cut by 2.5%.
We've only seen the promo
"We're talking about a brutal and vicious state budget that is the epitome of Netanyahu's economic policy. We're going to elections because of the state budget, because Netanyahu preferred calling elections in the assurance that he would be elected, after which he can pass his bitter budget. The budget that Netanyahu was supposed to pass today is a budget which will worsen the lives of Israeli families. Just this week, a top Ministry of Finance official said that the budget cut Netanyahu is planning will be harsh and that a lot of blood will be spilled over it," said Yachimovich.
As for the wave of price hikes, Yachimovich said, "What we're seeing today is just the promo of what will come the day after Netanyahu is reelected. Before the last elections, Netanyahu promised a 20% tax cut. He cut taxes, but not for the people, only for the biggest companies and highest income-earners. In practice, Netanyahu increased the tax burden on the middle class. We won't raise taxes on the middle class, but we'll offer a series of carefully argued moral and economic sources to fill the budget hole that Netanyahu dug with his own hands."
Yesh Atid chairman Yair Lapid said in response, "Yachimovich is dissembling. She will raise taxes on the middle class. The Labor Party's economic plan will bring more and more taxes on Israel's middle class, in favor of the big unions. Its only result is the threat of mass layoffs that will result among the middle class. Israel's middle class is the easiest to trample, whether you're on the left or right. This is why Yesh Atid was founded, to be the shield of Israel's middle class."
The Likud-Beytenu PR office said, Yachimovich, who received over NIS 50,000 a month as a television interviewer, while alongside her were investigators who earned less than a tenth of her salary, 'remembers' to initiate populist measures ahead of the elections. Shelly Yachimovich, who every day invents new imaginary amounts that she will allegedly distribute without even once explaining at whose expense they will come, today invented a new delusion about an alleged cut that will be made in the budget.
"We wish to make it absolutely clear that the figures that Yachimovich presented today are absolute lies intended to mislead the public. As someone who has never managed anything, Yachimovich should learn that it is the executive branch which draws up the budget, not anonymous officials, whom she claims she draws from. It is strange that on the day that the law raising taxes on the wealthy comes into effect, which raises the tax level on Israel's wealthy to one of the highest in the world, Yachimovich claims that there is a plan to cut taxes on the top 1%. This is just one example of her populist lies."
Published by Globes [online], Israel business news - www.globes-online.com - on January 1, 2013
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