Despite austerity measures that will cut into many Israeli paychecks, the Finance Ministry is increasing funding for projects aimed at the ultra-Orthodox community in an effort to encourage its members to join the Israeli workforce, Deputy Finance Minister Mickey Levy said Saturday.
Levy was speaking at an event in Kfar Sava two days after tens of thousands of ultra-Orthodox men demonstrated in Jerusalem against plans to draft them into the Israel Defense Forces and thence enable them to join the workforce.
Levy denied reports that earmarks for the Haredi community were being cut, saying money was being shifted to projects that would help the ultra-Orthodox enter the workforce.
“The budget additions to the ultra-Orthodox community are for placement projects for entering the labor market,” he said.
It was not immediately clear how much money Levy was talking about or what kinds of programs were getting the extra funding.
Some 45% of Haredim are officially in the workforce, according to Bank of Israel numbers. Officials say bringing that figure higher could boost the Israeli economy and take families off state-assistance rolls.
Levy also said that the new two-year budget approved by the Cabinet early on Tuesday will increase public spending and add another NIS 6.5 billion to the education budget and NIS 300 million for social causes.
A deal was signed late Monday to assure continued funding to the Haredi education system in exchange for ultra-Orthodox schools to begin teaching state-mandated core subjects, such as English and math.
The agreement, signed by Finance Minister Yair Lapid, Education Minister Shai Piron, and Shas head Aryeh Deri, came amid attempts by the Finance Ministry to partially rectify a NIS 39 billion deficit.
Speaking at a public debate in Kfar Saba on Saturday, Levy said that his party, Yesh Atid, has stayed true to the agenda it set prior to the elections.
“The party is keeping its promises to voters and to the middle class,” he said, adding that it is unfair to “judge [the Yesh Atid party] after two months of being in government.”
The deputy finance minister also said that neither he nor Yesh Atid party head Lapid were aware of the extent of the country’s deficit when campaigning for the elections.
“When we ran in the elections we did not know the size of the debt. When we took office, we discovered not a budget, but a sinkhole,” he said.
Levy went on to tackle the issue of the hefty salaries being paid to workers in semi-governmental corporations, such as the Israel Ports Development and Assets Company and the Israel Electric Corporation, vowing that “the finance minister intends to implement reforms” in such organizations.
He further stated that the new budget “did not harm the elderly and the students.” He added that children’s allowance, a social security payment which is distributed to the parents or guardians of children, will no longer be made to wealthy parents.
The new bi-yearly budget, which was approved by ministers Tuesday after weeks of stormy debates, and is now working its way through the Knesset, includes two percent budget cuts for all ministries in 2013, excluding Defense, Education, and Welfare. The number will rise to three percent in 2014, and is designed to make up for several changes made by the Cabinet that strayed from the original treasury proposal.
The Finance 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). Those measures are meant to slash a burgeoning national deficit that in 2012 reached NIS 39 billion ($11 billion), 4.2% of the gross domestic product.