Opposition parties and at least one coalition lawmaker slammed the economic relief plan presented by the government on Wednesday, saying it neglects the ultra-Orthodox community and only benefits a narrow group of people.
In a primetime press conference on Wednesday, Prime Minister Naftali Bennett, Finance Minister Avigdor Liberman and Economy and Industry Minister Orna Barbivai shared their multipart strategy for addressing the rising cost of living in Israel and promised a suite of measures to lower taxes for working families and decrease the prices of energy and food staples.
Bennett framed the NIS 4.4 billion ($1.4 billion) plan as “a new contract between the government and citizens, and a rational one,” focusing most of its effort on working families. “Citizens who work and bear the burden — they deserve to save more,” he said.
The move was announced amid intense public anger over rising costs, after the price of both gasoline and electricity went up, and after several major manufacturers and importers delayed or scratched plans to raise the cost of goods due to the pushback.
Bennett’s comments drew backlash from both opposition and coalition Knesset members, who argued that the plan ignored systemic problems in the ultra-Orthodox, or Haredi, community and only rewarded wealthier families through tax exemptions, which are not relevant to many households that don’t pass the tax ceiling required to enjoy such benefits.
The leader of the opposition Haredi party Shas, Aryeh Deri, argued that the plan “includes confusing steps meant to benefit ‘good families’ only — a codename for the continued discrimination and intentional harm to periphery communities and the Haredi community that will continue to suffer from the cost of living.”
He said the plan was merely a “charade meant to decrease public pressure,” slamming Bennett for his “cruel” division between “good” and “bad” households.
“No child should stay hungry in Israel. You’ve lost your empathy, shame and connection to the Israeli people,” Deri said of Bennett.
Deri signed a plea deal for tax offenses last week and resigned from the Knesset, but remains unrepentant and is still politically active.
MK Moshe Gafni, chairman of the Haredi opposition United Torah Judaism (UTJ) party, said the plan was too little, too late.
“For months you caused unimaginable damage — you raised taxes, issued directives, bills and regulations, passing a bad budget and hurting middle class working families, self-employed workers and small businesses,” Gafni said of the government.
“You hurt everyone, and now you’re trying to fix some of it, expecting to be praised. Don’t destroy and don’t fix. Undo everything you’ve done so far, the damage you’ve caused to the Israeli public and economy. Only then you can try and talk about benefits.”
UTJ lawmaker Ya’akov Asher said, “The only announcement made by Bennett and Liberman to the Israeli public was: ‘It will remain bad for you, but take comfort in knowing that the Haredi community and the weaker parts of society will suffer even more.”
The plan drew criticism from parts of the coalition as well.
Blue and White coalition party MK and Chairman of the Knesset’s Economic Affairs Committee Michael Biton said Thursday that the plan only benefited a small group of people.
He said the plan did not distribute benefits to parents fairly. Families with children at certain ages will receive less funding than younger children, and parents with high incomes will receive large stipends in some cases, he said.
He also noted that the plan did not cover small businesses that suffered heavy financial losses during the COVID pandemic.
“You can’t only help salaried employees and not them,” he said.
Biton said his comments reflected the opinion of his party leader, Defense Minister Benny Gantz.
Addressing the public criticism on Thursday, Liberman said there was simply not enough money to please everyone.
“Our intention was to primarily help families with school-age children. You can’t please everyone. Where will the money come from?” he said.
He noted that the Finance Ministry intends to legislate the plan’s various steps until April.
The plan includes measures to reduce income taxes for some Israeli families immediately.
The government will give an additional income tax credit point to parents of children aged 6-12 in 2022. The measure is expected to amount to an additional NIS 5,352 ($1,660) per family per child for the year. However, the measure, once enacted by legislation, is expected to last only for 2022.
It will benefit an estimated 530,000 working parents at the cost of NIS 2.1 billion ($652 million) to state coffers.
Middle-class working families are also expected to benefit from afternoon childcare subsidies, which will be extended to about 60,000 additional children in broader categories of socioeconomic standing, at an expected cost of NIS 150 million ($47 million).
The government will also create a negative income tax, in the form of a grant, to the approximately 300,000 low-wage earners who bring home less than the threshold for income taxation. They will receive a one-time bump of 20% to their 2022 take-home pay.
There is no income tax relaxation plan for taxpayers who fall outside of these parameters.
There are other measures in the plan for the cost of food, energy and consumer goods.
Other senior government officials also stressed they were aware of the criticism the plan had provoked, according to Channel 13 news.
The report said the Finance Ministry was considering expanding eligibility of tax credit points to children up to the age of 18, as well as a separate reimbursement payment for businesses whose revenues suffered a hit amid the fifth virus wave.
Carrie Keller-Lynn contributed to this report.