After long days that included differences of opinion, meetings, understandings and misunderstandings between Prime Minister Benjamin Netanyahu and Finance Minister Yair Lapid, Lapid convened a press conference today (Sunday) during which he presented the main points of the planned budget for 2015.
Lapid said that the agreements on the budget were reached during his last meeting with the prime minister, which was held on Wednesday, the eve of Rosh Hashanah.
According to him, the budget will be submitted to the government immediately after the Yom Kippur fast. "This is a budget with social news, without tax increases, with significant additions not only to security but also to social ministries. A budget that allocates resources to improving education, health, welfare, personal security - everything that touches the lives of Israeli citizens, both from the weaker classes and the middle class," Lapid declared. As you may recall, this morning (Sunday), Education Minister Shai Piron called MK Yaakov Asher and informed him that the issue of after-school care had been resolved for the better and without parents having to pay a significant amount for it. Presumably, after-school care was included in the "social" news that Lapid spoke about today.
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""If the previous budget was a budget of crisis, the current budget is a budget of hope and promise. Two years ago I said, 'We came to change.' Now this change is happening. Because a budget is not just about numbers. A budget is not just about fiscal discipline. A budget is about a girl I met in Yeruham who gave me an unforgettable scientific presentation, about two women in Migdal HaEmek who want to open a small business, about the combination of the umbrella agreement we signed for the construction of 7,500 housing units in Kiryat Gat that will provide thousands of high-paying jobs for the residents of the area. A budget is first and foremost our tool to give our children a better education and opportunities that we didn't have, to give our parents medical care and the opportunity to age with dignity, to give ourselves more jobs, more engines of growth, another opportunity to remember, as we remembered during Operation Protective Edge, that the State of Israel is a joint project of all of us: right and left, religious and secular, Jews and Arabs, everyone who is willing to bend their necks.".
According to him, the principles of the budget include the following agreements: taxes will not be raised, the defense budget will increase by 6 billion shekels, most of it in one-time spending. The social budget will increase significantly and a series of programs will be implemented for the weaker sections and the Israeli middle class. The deficit will increase to 3.41 trillion shekels.
""Our original plan before Operation Protective Edge was to pass the budget with a deficit target of 31.3 trillion shekels," Lapid said, but, he continued, "Let's put things in perspective for a moment: When I took office as Minister of Finance, I found an economy with a deficit forecast of over 51.3 trillion shekels. The budget hole was close to 35 billion shekels. We submitted the 2013-4 budget with a deficit target of 4.65 trillion shekels, and it included a series of difficult steps for the Israeli public. Instead of doing everything we were elected for, everything we went into politics for and in whose name we went - helping the weaker sections and the middle class, initiating processes and programs that would improve the lives of Israeli citizens - we should have been engaged in actions to rescue the economy. Before Operation Protective Edge, the actual deficit was only 2.61 trillion shekels, less than the target. The Israeli economy today is strong again, built on healthy foundations, and employment is among the highest in the world." "In the Western world, and growth for 2015, despite the slowdown we have experienced in recent months, is still expected to be higher than most European countries.".
""Instead of raising taxes, we will expand the deficit in a measured and reasonable manner, free up the government sector, and bring in money from other sources such as the Israel National Fund, which the time has come to subject to the Budget Foundations Law. We will collect more from natural resources, we will continue the ongoing improvement in tax collection, in which we have had quite a few successes in the past year, we will continue to close loopholes and tax schemes and to fight black money. The budget we are presenting contains particularly strong growth engines. It places an emphasis like never before on small and medium-sized businesses - from tax breaks to particularly cheap credit, because small businesses are a major growth engine for the economy all over the world.".
Regarding the defense budget, Lapid said, "The 2015 budget should provide solutions to the unique security problems of the State of Israel, as they were expressed in Operation Protective Edge. We will pay the 7-8 billion shekels of Protective Edge expenses in 2014. 6 billion shekels will be added to the 2015 defense budget, bringing it to the threshold of 57 billion shekels. I know that the tradition is that the Ministry of Finance always wants to cut defense, but that was not the case this time. The defense system can and should become more efficient, but from the first moment we made it clear that we do not recognize that there is a unique situation here. 4 billion shekels of the addition will be brought in as a special expense that is not included in the government spending ceiling. This allows us to submit a budget that significantly expands social services.".
As for the possibility that he will resign from the government if the zero VAT law is not passed, Lapid clarified that "a government that is unable to pass laws cannot exist, and therefore no, I will not have to resign if zero VAT is not passed. I will not have to resign, the government will disintegrate on its own. It is a shame that vested interests caused the delay of the plan for narrow political reasons even though they know that the plan will change the housing market and lower prices.".
