Lapid: Budget buys insurance economy won't collapse

Finance Minister Yair Lapid tells "IDF Radio": Riki Cohen will lose NIS 290 from her monthly income. This will not be forever.

"I will keep my promises. I will protect the middle class, and part of this is to ensure that the economy and all the services won't collapse," Minister of Finance Yair Lapid told IDF Radio" (Galei Zahal) today. "Riki Cohen will lose NIS 290 from her monthly income, but she is buying insurance that the economy won't collapse. This will not be forever."

"IDF Radio": The figure you cited is unrelated to VAT and the other taxes which will be levied.

Lapid: "I'm not saying that it will be easy. We dont want to become bankrupt like Greece or Spain. They have over 50% unemployment among the young, and you dont want to wake in the morning to discover that everything you own has lost half its value."

But you continue to make the same promises you made before the elections.

"True, and I will keep them. Until now, politics chose the easy option, which was to sweep things under the rug. We made difficult choices, which if we were to make them in six months, we would not have the money to pay old age or disability pensions. We've done what hasnt been done in 65 years. I'm just two months as finance minister, and I havent solved all of Israel's economic problems. I apologize.

"We havent touched anything medical or disability benefits. We will not abandon Israel's sick. We've expanded the healthcare basket, and we've increased payments to Holocaust survivors by NIS 500 million. We will take care of society's poor."

You promise that things will get better in a year or a bit more.

"Quite correct. Every economy which sits on healthy foundations will ultimately improve, but the budget situation was poor, which was why Yesh Atid won 19 Knesset seats. Both [Governor of the Bank of Israel Prof. Stanley] Fischer and [President Shimon] Peres have said that this is the right economic plan, which will pull the economy out of the mire. The discussion with people like these is businesslike and not emotional. The economy will be put on the right track. We will emerge from the mire."

But taxes on people moving upmarket are being raised. This 3.5% tax amounts to tens of thousands of shekels.

"This is one of the taxes that I hate the most. It should be cut, and we'll do that later. We will lower housing prices, but it will take a little time."

Your plan does not have what we call a growth option.

"Of course we've created growth engines. The concentration committee is a growth engine, the open skies reform, the vehicles reform, the measures in housing, and, most of all, bringing a great many people into the labor market are all growth engines. It should be remembered that this year's budget is an expansionary budget. It isn't an austerity budget, and people forget that. People dont know the facts. In 2015, the commitments will be much less."

What will happen to the defense budget this year?

"I also sit in the security cabinet. My hands trembled when we cut the defense budget. I hope that there won't be additional threats, but if there are, we'll have to protect Israel's security. We'll do it. I hope that there won't be irresponsible requests later in the year."

The public thinks you've tricked it.

"We conducted two polls last week, which found that, during my toughest period, I lot only 2-3 Knesset seats, and if that is the case, then I'm in good shape. I agree that polls are not serious.

Who can promise us today that we won't have such a big deficit in the future?

"To do what needs to be done is always hard and complicated, but that's why I was elected. At the difficult crossroads, I will do the right thing."

Published by Globes [online], Israel business news - - on May 16, 2013

Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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