Finance Minister Yair Lapid attempted on Wednesday evening to justify the plan he proposed which includes significant budget cuts and tax increases, and which has been met with anger among Israelis.
“I will not hand out money the State doesn’t have,” Lapid said in a joint news conference with the chairman of the Histadrut Labor Federation, Ofer Eini, during which the two announced they had agreed to postpone the rise in the wages of state employees for two years because of the financial situation. "Everybody wants to get rid of the deficit but everybody also wants someone else to pay for it," said the Finance Minister.
"People are angry and I cannot argue with that," he added. "I'd rather stand here and hand out some candy, but that's exactly what caused the deficit. There are no miracles when it comes to these things."
Lapid emphasized, “I am not prepared to reach a situation like in Greece, when everything collapsed. Those who are protesting today say ‘That cannot happen here’, but it can happen if we do not do anything, and it will not happen on my watch.”
"After many years,” said Lapid, “this time the working man is not the only casualty of the cuts. We also imposed cuts on the rich, and the tycoons will no longer be able to control the economy."
Hinting at the cuts to the hareidi-religious population, Lapid said, "The cuts this time also include sectors that were considered politically immune until today. We are shifting the equality in the burden in the economic sense as well."
"I have been the Minister of Finance for about a month and a half and I apologize that we have not yet solved all the problems the economy has had for years, but we've shown here that there is a common way and that even when you don’t agree you can reach a compromise."
The plan introduced on Tuesday includes a 1.5% increase in income tax, which is expected to bring in more than 4 billion shekels, a 1% increase in the VAT, to 18%, and a reduction of child payments to 140 shekels per child per month.
The government will also end its subsidies for afternoon care for children aged 9, and will reduce its subsidy for dental care for children. Housewives will be required to pay health tax and national insurance institute (Bituach Leumi) payments.
Each government ministry will be required to cut their staff by 1%, and there will be no new hires until 2015. The Foreign Ministry will cut five foreign offices.
The opposition criticized Lapid’s comments from Wednesday evening.
Meretz chairwoman MK Zahava Galon called Lapid “arrogant” on her Facebook page, adding, "He built an entire election campaign around the promise of a magic solution to all our troubles, and now he produces – through a horrific budget – problems that will accompany us for many years."
MK Ariel Atias (Shas) also criticized Lapid, saying, "Under the guise of being concerned for the working man, Lapid received 19 seats and now his voters feel deceived.”