The negotiations of over the formation of a new governing coalition in Israel are proceeding, and Prime Minister Benjamin Netanyahu's natural partners, chiefly the haredi (ultra-Orthodox Jewish) parties, are presenting demands that would cost the Israeli taxpayer NIS 4-5 billion annually.
Shas and United Torah Judaism demands mean abolition of the cuts in child allowances and in transfers to religious institutions carried out during Yair Lapid's term as minister of finance. The haredim are demanding that child allowances should be restored to the levels they were at before Lapid's time at the Ministry of Finance, a move that would cost about NIS 2.5 billion a year. Restoring the cuts in funding for religious institutions would cost about another NIS 0.5 billion a year.
During the election campaign, Shas undertook to cancel VAT (value added tax) on basic items. This promise has now become a demand in the coalition negotiations: it affects some 50 basic products, and if it materializes it will cost the state some NIS 1 billion a year.
The haredim are also demanding the cancellation of criminal sanctions on those who evade military or national service, sanctions that Lapid and his Yesh Atid party introduced in legislation meant to share more equally the burden of service among the different sections of Israel's population.
Habayit Hayehudi, led by Naftali Bennett, is also presenting dozens of demands that, if implemented, will cost billions of shekels annually, such as strengthening northern settlements and raising pay for army draftees.
Yisrael Beitenu, led by Avigdor Liberman, agrees to the demand for abolition of VAT on basic products, and is also demanding an increase in construction of public housing through an allocation of 7.5% of all housing built on state land. The party is also demanding progress on the bill for provision of 90% mortgages with state guarantees introduced by MK Orly Levi-Abekasis, as well as legislation imposing the death penalty for terrorists, which Liberman promised in the election campaign.
Published by Globes [online], Israel business news - www.globes-online.com - on March 29, 2015
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