150 protest tax hikes and budget cuts, package expected to pass in Cabinet Monday

One hundred and fifty social activists held a demonstration opposite the Prime Minister’s Office in Jerusalem on Monday, protesting against proposed tax hikes and budget cuts set to be passed by the Cabinet.

Despite opposition from several ministers and a wide swath of the public, the controversial economic package was expected to gain governmental approval.

The plan, which includes a one percent income tax and sales tax hike and cuts to the budgets of all ministries but defense, welfare and education, is being touted by Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz as necessary to close the budget deficit while providing new social programs. The measures aim to add an estimated NIS 15 billion to the state treasury.

Several political figures have voiced their opposition to the cuts and tax raises, including ministers from the Shas party, the Independence party, Public Security Minister Yitzhak Aharonovitch and Deputy Health Minister Yaakov Litzman.

“With one hand, [the government] promises benefits to the public, and with the other takes from them through taxes,” Housing and Construction Minister Ariel Atias told Ynet news Sunday.

However, most ministers from Likud and Yisrael Beytenu support the package, and far outnumber those against the cuts.

Labor leader Shelly Yachimovich slammed the expected cuts, saying they were the result of a failed economic policy. In an interview to Israel Radio Monday morning, Yachimovich said that the government was planning to overcome the deficit using the same economic tools that created the problem in the first place.

“Our welfare state is falling apart, services are crumbling. We must protect out country from unrestrained market forces. The state must take responsibility of its citizens,” said Yachimovich. “I agree that the hole needs to be filled, but not by increasing the sales tax, which falls unfairly on the shoulders of the poor.”

The measures have also met opposition in the public, with people taking particular exception to Netanyahu’s comment that there’s no such thing as a free meal.

A message posted to Netanyahu’s Facebook wall recently by a mother struggling to get by despite years of paying taxes and service to the state gained tens of thousands of likes and begot a flurry of similar letters to the prime minister via Facebook against the measures.

“I know that you’ll knock on my door and I’ll open it and you’ll give me my free meal. How fun, eh? because for 18 years I haven’t done anything,” Tali Oz Albo wrote sarcastically. “I just sat and waited for my free meal. I don’t pay loads of money for my kids’ education. I didn’t open a business in the State of Israel and pay taxes from here to Honolulu…”

Netanyahu and Steinitz say the package is needed to pay for a series of programs implemented following last summer’s cost of living protests, including free school from age three.

Steinitz has said that he wants to use the measures to protect the country from going the way of several Euro bloc countries who have found themselves in harsh financial straits.

“This is a defensive line for Israel’s economy and for her citizens. who ever suggests otherwise, whoever suggests that we proclaim that we are not on the edge of the deficit, [I] suggest Spain and Greece,” he said the last week.

While Israeli media has reported the average Israeli family will end up paying an estimated extra NIS 1,700 per year, Netanyahu claimed that the new programs will end up putting citizens ahead financially.