Lapid fires back at budget critics: ‘The numbers add up’

Finance Minister Yair Lapid chastised opposition politicians Monday for their attacks on the 2015 budget he presented a day earlier, saying there’s no funny math involved.

The budget, presented after weeks of political wrangling, funnels NIS 7-8 billion to the Defense Ministry, without raising taxes but through heavier borrowing. Opposition lawmakers claimed that Lapid’s proposal was a pie in the sky plan that did not add up numbers-wise.

“When we made cuts, they claimed we were cutting back, and when we add [money to the budget] they shout that we are adding, but the factually, the numbers add up,” Lapid said in an interview on Army Radio. “The state budget is NIS 323.5 billion, and from there, there is money designated to protect IDF fighters and money designated to protect southern residents — this is money that we need to spend.”

Speaking to Israel Radio, Lapid defended the budget hikes but said the money being spent on defense would need oversight.

Following Lapid’s Sunday press conference, opposition politicians rained down criticism on both the budget and the finance minister personally.

“He promised Israeli citizens everything, apart from a trip to the moon,” the Labor Party said in a statement Sunday. “It’s simple to declare that taxes won’t rise, the defense budget will grow, and the money will flow to welfare, education and healthcare, but Lapid neglected to tell the public one thing: Where does he intend to get the money?

“If we had a shekel for every promise Lapid made, the State of Israel would probably be able to close the deficit and stop collecting taxes.”

Lapid’s announcement on Sunday capped off an extended political struggle with Prime Minister Benjamin Netanyahu and Defense Minister Moshe Ya’alon, who consented to a plan Wednesday to increase the defense budget without raising taxes.

According to the proposal, NIS 7-8 billion ($1.9 – 2.2 billion) will be added to the defense budget this year and another NIS 6 billion ($1.6 billion) next year. The added funds will cover the costs of this summer’s 50-day Operation Protective Edge in Gaza, as well as training and personnel.

Rather than raising taxes to cover the costs, Netanyahu and Lapid agreed to raise the deficit to 3.4 percent, slightly higher than the 3% target Netanyahu hoped to achieve.

To keep the deficit down, Netanyahu wanted to raise taxes, but Lapid vehemently opposed the measure and eventually prevailed, arguing that average citizens shouldn’t have to bear the cost of the war in Gaza and that a tax increase would further slow growth. Lapid even went as far as threatening to bolt the coalition in the event of a tax hike.

Lapid said Sunday that the newly minted budget not only spared citizens a tax hike, but also pumped resources into social welfare ministries.

Joining Labor in criticizing Lapid and the budget, Meretz leader Zahava Gal-on rapped the finance minister for making “empty promises” and going easy on the upper classes.

“Lapid continues his devotion to Netanyahu’s legacy and wraps it in empty words and promises that he cannot fulfill,” she said. “Most of the budget funds flow into the Defense Ministry along with a decision not to cancel corrupt [tax] exemptions and not to raise taxes on the rich, which guarantees only one thing — what was will be, social services will continue to collapse and the cronies will continue to celebrate.”

She further blasted Lapid for boasting that money will flow into social welfare ministries when those budgets are designed to grow automatically to keep up with population growth, and contended that “the numbers simply don’t add up.”

“Also with the deficit, Lapid is putting one over on us when he says he will keep the deficit at 3.4% without raising taxes or cutting other ministry budgets,” she added. “This is not possible, the number simply don’t add up. Either you make cuts or raise the taxes or you overshoot the deficit [target].”

While the majority of condemnations came from the opposition side of the aisle, Lapid’s fellow coalition members were not unanimous in their approval either.

Knesset Finance Committee Chairman Nissan Slomiansky (Jewish Home) said he was glad to see the end of the budget saga between Lapid and Netanyahu, but joined the opposition in questioning where the money was coming from to fund the 2015 budget and invited the finance minister to explain it to him.

“The upcoming budget is not complete,” he added. “It is lacking growth generators and it represents a deficit growth to 3.4% that is inconvenient, in my opinion.”

However, he was “glad that they answered my demands, among them not raising the taxes, that there won’t be more cuts to government ministries and the defense budget for 2015 won’t rise more than NIS 6 billion.”

And even with the increase in defense spending, defense officials were not pleased. A senior official said that the NIS 6 billion increase for 2015 will mean that training and equipment purchase will be sharply curtailed, Israel Radio reported last week. He said that the implications of the budget will be presented to Netanyahu, the cabinet, and the relevant Knesset committee.

The prime minister had been pushing for an additional NIS 20 billion ($5.5 billion) to be allocated to the defense establishment — NIS 9 billion to cover the costs of Operation Protective Edge in Gaza and NIS 11 billion for expanded operational and personnel spending.