There was much talk during the elections of “doing something” to help the poor and the middle class, but the elections are over, said Yisrael Liebman, chairman of the Mekimi organization, which helps families learn how to balance their budgets and survive financially. “There is a huge budget deficit that must taken care of, and that will be the first priority of the new government,” he said at an economic conference in Binyamin Thursday. No matter what kind of government is formed and regardless of what the parties promised, “there will be painful economic edicts that will significantly impact all families in Israel.”
The actual deficit is not known, because the 2013-2014 budget has not yet been submitted - and in fact, the expected cuts in spending that the government is going to have to implement was the reason Prime Minister Binyamin Netanyahu called new elections.
Among the edicts Liebman expects to be enacted: a 2.4% average increase in municipal taxes; 2.8% higher costs for water; 10%-15% more money to be laid out on electricity bills; and increases in food, fuel, and housing costs.
A large part of those increases will be due to the hiking of taxes – direct or indirect – that will worm it way into the pocketbook of Israelis. Besides setting a poor example for families by spending more than it earns, said Liebman, the idea of the government paying off its debts by “economically persecuting” poor and working families was a horrible injustice. “It's just unthinkable that families that are barely making the average income would have to lay out from the little they have to pay off the huge deficit, which was without question caused by poor government planning,” he said.
Liebman said that at the very least, tax increases should be graded according to family incomes. “An increase in outlay of NIS 50 for one family may mean nothing, while for another it may mean the difference between having or not having chicken on Friday night. At Mekimi we see situations like this every day,” he added.