The Finance Ministry asked government ministers on Wednesday to make drastic spending cuts, including reductions in the defense budget, child support allowances and in educational programs.
It suggested cutting 2.5 billion shekels ($600 million) in defense spending, postponing the retirement age in the IDF and cutting salaries of IDF professional soldiers who are not serving in combat units.
The ministry also wants to reduce child support payments by 10 percent and slice supplementary socio-economic payments that the Likud promised to the Shas and United Torah Judaism parties as part of coalition agreements. Additional National Insurance payments will be frozen until the end of next year. The budget cuts are expected to save about NIS 900 million ($217 million).
Shas, a key partner in the coaliton, warned Thursday morning it will not allow any reductions in child support stipends. The Finance Minstry may have proposed the cuts in order to reach a "compromise" whereby child support allowances will not be reduced but also will not be raised for a period of time.
The Finance Ministry requests will make it harder for citizens who are out of work to receive unemployment benefits. Citizens will lose their unemployment compensation if they refuse any job offer within a 50 mile (80 km) radius from their home.
The Ministry also wants to postpone expanding the “negative tax” program for employees who receive low salaries. The “negative tax” program, which is presently effective in Jerusalem and outlying communities, is expected to be implemented throughout Israel by next year.
New Mothers to Pay NIS 50 Per Day
Patients – including mothers who have given birth – would have to pay a tax of NIS 50 for each day they are hospitalized, according to the new proposal. At present, hospitalization expenses are fully paid by the National Insurance Institute (Bituach Leumi). Israeli citizens are required to pay a monthly fee as part of the government’s mandatory health insurance program.
Minister of Welfare and Social Services Yitzchak Herzog, in an interview on Thursday with Voice of Israel government radio, criticized the Finance Ministry’s recommendations, saying that he was "shocked by the sadistic measures that will harm the lower class."
The Kadima party charged that the proposed cuts remind the public "the worth" of promises by Prime Minister Binyamin Netanyahu and "why no one believes him." It added that the government "has declared war on the middle class and the weaker sectors of society."