Hirschsohn (pictured) held a press conference in Jerusalem for the occasion. He said that though the recent war changed things dramatically, "it does not dictate that the State must write a blank check [for security needs]." Despite this, his new budget proposal includes a one-time 3.5-billion shekel allocation for the Defense Ministry.
Hirschsohn also included a one-time 2.5-billion grant for social needs; see below.
On the other hand, the long-promised welfare cuts such as child allowances will not be increased, in opposition to the coalition agreement with Shas, and the minimum-wage increase will be postponed by a year, in contrast with the coalition agreement with Labor.
Political Instability
Threats to the integrity of the government coalition immediately resulted. Labor Party leader Defense Minister Amir Peretz said yesterday that freezing the minimum-wage increase would lead Labor to quit the government. "This is my red line," he said.
In light of such threats, the ruling Kadima Party has been making overtures to other parties, most notably Yisrael Beiteinu headed by MK Avigdor Lieberman, regarding their possible entry into the government coalition.
Minister Hirschson said he does not plan to raise taxes, including Value Added Tax: "Raising VAT would not help the citizens, and would rather hurt the underprivileged classes... The public must be allowed to sleep quietly," he said, attempting to explain why he would not give more money to the defense establishment.
But representatives of the public are already wide awake. The Latet [To Give] organization released a statement saying, "The government's holiday gift to the 400,000 families living in poverty is: 'Work it out yourselves.' The government is trying to cover up with media spins the fact that every time there is a budgetary problem, the lower classes are the first victims."
More significantly, Ofir Eini, the Chairman of the nationwide Histadrut Labor Union, threatens to strike the entire economy if the "one-sided decisions in the budget proposal are not retracted." He said it was even worse than former Finance Minister Binyamin Netanyahu's budgets. The irony was apparent to all, in that nationwide Histadrut strikes are usually associated with former Histadrut chief Amir Peretz - who today serves alongside Finance Minister Hirschsohn as the government's Defense Minister.
With Labor faction whip MK Ephraim Sneh promising that Labor would fight the proposed budget, Labor MK Shelly Yechimovich accused the new budget of being a "direct continuation of the Netanyahu policy. It includes a poisonous swamp of privatizations and blows to the poor. Labor must not agree to this budget, in which the poor and middle class pay the price while the top 10% are exempt from all cuts."
The War's Effect
The Finance Minister said the budget would not be increased over past years: "Our goal is to maintain our responsible fiscal policies." He admitted, however, that the budget "is not the same one I planned to present before the war. We cannot do everything we planned, because of the war, but we insist that Israel's needs receive significant budget increases."
Among the increases are 237 million shekels to the basket of subsidized medicines; 200 million to children at risk, another 100 million to higher education, and another 70 million to day care.
On the other hand, one billion shekels will be cut from the Israel Railways development budget. Another billion will be saved by not increasing the welfare allowances, and another 340 million will be saved by postponing the minimum-wage increase.
Hirschsohn also included a one-time 2.5-billion grant for social needs; see below.
On the other hand, the long-promised welfare cuts such as child allowances will not be increased, in opposition to the coalition agreement with Shas, and the minimum-wage increase will be postponed by a year, in contrast with the coalition agreement with Labor.
Political Instability
Threats to the integrity of the government coalition immediately resulted. Labor Party leader Defense Minister Amir Peretz said yesterday that freezing the minimum-wage increase would lead Labor to quit the government. "This is my red line," he said.
In light of such threats, the ruling Kadima Party has been making overtures to other parties, most notably Yisrael Beiteinu headed by MK Avigdor Lieberman, regarding their possible entry into the government coalition.
Minister Hirschson said he does not plan to raise taxes, including Value Added Tax: "Raising VAT would not help the citizens, and would rather hurt the underprivileged classes... The public must be allowed to sleep quietly," he said, attempting to explain why he would not give more money to the defense establishment.
But representatives of the public are already wide awake. The Latet [To Give] organization released a statement saying, "The government's holiday gift to the 400,000 families living in poverty is: 'Work it out yourselves.' The government is trying to cover up with media spins the fact that every time there is a budgetary problem, the lower classes are the first victims."
More significantly, Ofir Eini, the Chairman of the nationwide Histadrut Labor Union, threatens to strike the entire economy if the "one-sided decisions in the budget proposal are not retracted." He said it was even worse than former Finance Minister Binyamin Netanyahu's budgets. The irony was apparent to all, in that nationwide Histadrut strikes are usually associated with former Histadrut chief Amir Peretz - who today serves alongside Finance Minister Hirschsohn as the government's Defense Minister.
With Labor faction whip MK Ephraim Sneh promising that Labor would fight the proposed budget, Labor MK Shelly Yechimovich accused the new budget of being a "direct continuation of the Netanyahu policy. It includes a poisonous swamp of privatizations and blows to the poor. Labor must not agree to this budget, in which the poor and middle class pay the price while the top 10% are exempt from all cuts."
The War's Effect
The Finance Minister said the budget would not be increased over past years: "Our goal is to maintain our responsible fiscal policies." He admitted, however, that the budget "is not the same one I planned to present before the war. We cannot do everything we planned, because of the war, but we insist that Israel's needs receive significant budget increases."
Among the increases are 237 million shekels to the basket of subsidized medicines; 200 million to children at risk, another 100 million to higher education, and another 70 million to day care.
On the other hand, one billion shekels will be cut from the Israel Railways development budget. Another billion will be saved by not increasing the welfare allowances, and another 340 million will be saved by postponing the minimum-wage increase.