Criticism of Finance Minister Yair Lapid’s proposed budget cuts and tax hikes mounted on Thursday, with social protest groups announcing two demonstrations against perceived violations of Lapid’s pre-election campaign promises.
The first demonstration drew hundreds on Thursday night in front of Lapid’s home in the posh north Tel Aviv neighborhood of Ramat Aviv Gimmel. One of the demonstrators, Ruth Kelian, told Maariv that “our message is clear — don’t mess with the weaker classes. Don’t renege on the promises that you gave the nation before the elections.”
The protest at Lapid’s home was organized by two groups called “The Not Nice People” and the “Transit Camp.”
“Perhaps Lapid thinks that the public is a camel upon whose back he can keep piling more and more [straw],” Kelian said. “But eventually the camel breaks.”
On Saturday night hundreds of people are expected to gather in Tel Aviv in what organizers hope will be the largest demonstration since the massive social justice protests of 2011.
Lapid presented the budget proposal to President Shimon Peres on Thursday, expressing confidence that the measures would help Israel close its burgeoning deficit “relatively quickly, because we are an economically healthy country.”
Much of the criticism hinges on the decision to opt for across-the-board tax hikes and cuts to services while forgoing some measures that could bolster the state coffers without worsening the plight of the middle and lower classes. Among the proposed measures that the treasury chose to pass over was an inheritance tax, differential value-added tax rates, and a higher levy on income from investments.
Histadrut labor federation head Ofer Eini told on Thursday said that if the social protests do return to the streets, the Histadrut will join the demonstrators. Eini’s comments came only a day after he and Lapid faced the media together to announce an agreement they had reached to avert a general labor strike in response to the austerity measures.
Alon Lee Green, a social justice protest organizer, told Maariv that the march was initially set to take place a week from Saturday night, but that anger among the protesters was so great that they moved it up by a week.
“We are not simply saying that raising VAT is bad, or that raising taxes and cutting benefits to children and to the elderly is terrible,” said Green. “Over the past two years, we have come to realize that there are other options that can be implemented… rather than taking money from children, we can take it from tycoons.”
The ministry is looking to cut government spending by some NIS 6.5 billion (almost $2 billion) in 2013 and by NIS 18 billion (some $5 billion) in 2014, largely through the cuts in defense, child benefits (NIS 2 billion or $560 million) and transportation infrastructure projects (NIS 1.2 billion or $336 million).
On Thursday, Economics Minister Naftali Bennett (Jewish Home) came out with emphatic support for his political ally Lapid.
“There was an ‘explosion’ in the money pipeline, and every month we wasted money that we don’t have,” Bennett wrote on Facebook. “We were racing toward certain bankruptcy. So Lapid applied a tourniquet and stopped the bleeding. We knew there was no choice; it was the only correct and responsible thing to do, even if it is extremely unpopular.”
Bennett went on to say that “it is impossible to cover a deficit of NIS 50 billion without painful choices. This government has four years — whatever needs to be fixed, we’ll fix.”
On Wednesday, Prime Minister Benjamin Netanyahu voiced his support for the budget proposal, which was largely based on the proposal he and then-finance minister Yuval Steinitz drew up in 2012 but didn’t succeed in passing. Netanyahu noted, however, that he may yet amend the clause in the budget calling for a NIS 4 billion ($1.12 billion) cut in defense spending.
The Finance Ministry also raised value-added tax by 1 percent (to 18%), increased income tax by 1.5% across the board, and boosted corporate tax to 26%, among a series of measures.
Amid the public discourse on the budget, a Channel 2 poll on Wednesday found that 42% of the voting public ranked Lapid’s performance as finance minister as poor, with 52% ranking him as good or mediocre, and with the remaining respondents offering no opinion.
When asked if appointing the freshman politician to the role was a mistake, 50% said yes. While 47% of Yesh Atid voters said they would still vote for Lapid if the elections were held today, 28% said they would vote for somebody else, with 28% saying they don’t know.
The survey, conducted by Shiluv Millward Brown research institute, polled 400 adults. The survey had a 4.9% margin of error.
The budget plan has been denounced by the opposition. Labor party leader and opposition head Shelly Yachimovich called it “sheer cruelty” and accused Lapid of abandoning the public.
Meretz head Zahava Gal-on said the plan is one that would “destroy the working public,” and that it constituted “a stark betrayal of Lapid’s promises to voters.” Gal-on also accused Eini of selling out the workers.