Budget cuts, army service cuts… tax hikes

With Israelis about to feel the pinch in their back pockets, the press provides intimate details of which particular tax hikes and budget cuts — which have been waiting almost a year in the wings — they should anticipate.

Israel Hayom reports that Finance Minister Yair Lapid presented his fiscal package to government ministers ahead of a cabinet debate on the issue, “and the picture painted is even gloomier: broader cuts will begin, and heavier taxes will be levied.” This new tax hike is projected to cost every middle class family more than NIS 3,000 per year, the paper says. According to Haaretz, the hikes will result in NIS 3 billion of revenues for the state instead of the previously projected NIS 2 billion.

“And we’re paying the price,” reads Yedioth Ahronoth’s headline. The most painful part of the projected measures, it says, is that income tax will be raised by 1.5 percent instead of the expected 1% at the beginning of 2014. “The change will be felt in salaries starting in January and will affect all workers who pay income tax — everyone relative to his tax bracket,” it reports.

Maariv tries to keep its readers calm, emphasizing to them that the proposal is part of “discussions that are managed like the shuk.”

“The treasury submits tougher cuts with the expectation that, since there will be opposition by ministers and MKs to the cutbacks, it will be forced to concede on some, and thus [the finance minister] will arrive at a budget he can live with,” it says.

Haaretz columnist Nehemia Shtrasler writes that Lapid has zigzagged on the issue of the state’s deficit in recent weeks and only this weekend settled on 4.65% after S&P knocked Israel’s credit rating down. Lapid also avoided raising university tuition or the female retirement age out of fear of disenfranchising people who voted for him, he says.

“Lapid hasn’t yet internalized the fact that a finance minister who’s looking for love and popularity will end up a failure,” Shtrasler says.

When not worrying about the pinch of new taxes, the press is still talking about Syria. According to Maariv, citing a Kuwaiti report, Syrian President Bashar Assad told Russia he will strike back at Israel if it attacks him again. Russia then passed the message to the United States, which passed it to Jerusalem. It cites Arabic media saying that Deputy Foreign Minister Faisal Mekdad’s threat that Syria will respond as it pleases, when it pleases, was evasive and regarded as “raising a white flag to Israel.”

Israel Hayom cites a CNN report saying that at least 42 Syrian soldiers died in the alleged Israeli airstrikes on Syria over the weekend, and that no fewer than 100 are still missing. It notes that two mortars fired from Syria landed in Israeli territory on Monday, but Israel didn’t return fire.

It quotes GOC Northern Command Maj. Gen. Yair Golan saying, “It’s always right to prepare, but there are no winds of war.”

With everything going on up north, the announcement that the IDF will be cutting down mandatory service for men by four months comes as a surprise to some. According to Yedioth, Defense Minister Moshe Ya’alon and Chief of Staff Lt. Gen. Benny Gantz approved a plan put forth by the Peri Committee for equalizing the burden of service.

“Mandatory service will be reduced to only 32 months, except in the case of elite units and special arrangements,” starting in 2015, it reports. “Service for soldiers in the hesder yeshiva track will be increased, despite this, from 16 to 24 months.” It also reports that some female soldiers will have increased service length according to their position.

Haaretz reports that cutting back on service time — one of several draft measures that the IDF intends to implement — will save the Israeli economy NIS 1.4 billion per year, “by virtue of the earlier entry of young Israelis to the job market, paying taxes.”

Maariv notes that two weeks ago it reported that the IDF said it was not discussing the issue of truncating mandatory army service despite falling draft rates. On Monday, however, “the picture changed. The IDF expressed support for shortening army service but on condition of certain circumstances — such as budget — which were proposed in the past but didn’t convince the IDF to agree to shortening service.”

MK Elazar Stern, formerly the head of the IDF’s human resources hierarchy, praises the measure in Israel Hayom, saying “the defense minister’s decision implants new optimism in us of the possibility to shorten [IDF] service and perhaps, in other words, some type of differentiated service.” Stern envisions a service model which “won’t harm the model of a people’s army but at the same time will enable the IDF to hold onto those it really needs at the end of their service, and release early those the army can manage without if their service is shortened by a few months.”